Bore Family Office
Valuation Report — Celestica Inc. (CLS) • March 14, 2026
Unlevered DCF (FCFF @ WACC) • Discount Rate: 10.50% • Current Price: $263.46
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
Celestica is a leading Electronics Manufacturing Services (EMS) and Original Design Manufacturer (ODM) headquartered in Toronto, Canada. The company operates two segments: CCS (Communications & Cloud Solutions), which produces AI/ML compute platforms, networking hardware, and data center components for hyperscalers and ODM customers; and ATS (Advanced Technology Solutions), serving aerospace, defense, industrial, and healthcare customers. CCS is the growth engine, comprising ~55% of revenue and growing faster as AI data center demand accelerates.
Celestica has emerged as a key manufacturing partner for hyperscalers (Microsoft, Amazon, Google) building custom AI compute platforms. The company benefits from the trend toward vertically integrated, custom hardware — designing and manufacturing boards, switches, and server infrastructure that was previously handled by ODMs like Quanta and Foxconn. FY2025 revenue of $12.39B (+28%) and FCF of $458M demonstrate the business has reached a scale where operating leverage is driving meaningful cash flow generation.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|
| CCS (Communications & Cloud Solutions) | $6,815M | 55% | +45.0% | — | AI/ML compute, networking, hyperscaler ODM work — primary growth driver |
| ATS (Advanced Technology Solutions) | $5,576M | 45% | +8.0% | — | Aerospace, defense, industrial, healthcare electronics manufacturing |
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|
| Revenue ($M) | $5,635 | $7,250 | $7,961 | $9,646 | $12,391 |
| EBITDA ($M) | $294 | $405 | $469 | $751 | $1,216 |
| Operating Income ($M) | $168 | $289 | $338 | $599 | $1,041 |
| Net Income ($M) | $104 | $180 | $244 | $428 | $832 |
| EPS (diluted) | $0.82 | $1.46 | $2.03 | $3.61 | $7.16 |
| Free Cash Flow ($M) | $175 | $102 | $201 | $303 | $458 |
| Annual DPS | $0.000 | $0.000 | $0.000 | $0.000 | $0.000 |
| Total Debt ($M) | $794 | $786 | $675 | $797 | $776 |
| Rev YoY Growth | — | +28.7% | +9.8% | +21.2% | +28.5% |
| EBITDA Margin | 5.2% | 5.6% | 5.9% | 7.8% | 9.8% |
| Operating Margin | 3.0% | 4.0% | 4.2% | 6.2% | 8.4% |
| Net Margin | 1.8% | 2.5% | 3.1% | 4.4% | 6.7% |
📈 DCF Scenarios
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | WACC | Intrinsic Value | vs Price |
|---|
| 🔴 Bear | 20.0% | 10.0% | 2.5% | 10.50% | $146 | ▼44.8% |
| 📊 Base | 35.0% | 15.0% | 3.0% | 10.50% | $314 | ▲19.3% |
| 🚀 Bull | 50.0% | 22.0% | 3.5% | 10.50% | $702 | ▲166.3% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: 20.0% | Stage 2: 10.0% | Terminal: 2.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|
| Year 1 | Stage 1 | $0.62B | $0.56B | $0.56B |
| Year 2 | Stage 1 | $0.75B | $0.61B | $1.18B |
| Year 3 | Stage 1 | $0.90B | $0.67B | $1.84B |
| Year 4 | Stage 1 | $1.08B | $0.72B | $2.57B |
| Year 5 | Stage 1 | $1.29B | $0.79B | $3.35B |
| Year 6 | Stage 2 | $1.42B | $0.78B | $4.13B |
| Year 7 | Stage 2 | $1.57B | $0.78B | $4.91B |
| Year 8 | Stage 2 | $1.72B | $0.77B | $5.69B |
| Year 9 | Stage 2 | $1.89B | $0.77B | $6.46B |
| Year 10 | Stage 2 | $2.08B | $0.77B | $7.23B |
| Terminal | — | TV=$26.7B | PV(TV)=$9.8B (58% of EV) | EV=$17.1B |
Base Scenario
Stage 1: 35.0% | Stage 2: 15.0% | Terminal: 3.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|
| Year 1 | Stage 1 | $0.70B | $0.64B | $0.64B |
| Year 2 | Stage 1 | $0.95B | $0.78B | $1.41B |
| Year 3 | Stage 1 | $1.28B | $0.95B | $2.36B |
| Year 4 | Stage 1 | $1.73B | $1.16B | $3.52B |
| Year 5 | Stage 1 | $2.33B | $1.42B | $4.93B |
| Year 6 | Stage 2 | $2.68B | $1.47B | $6.41B |
| Year 7 | Stage 2 | $3.08B | $1.53B | $7.94B |
| Year 8 | Stage 2 | $3.55B | $1.60B | $9.53B |
| Year 9 | Stage 2 | $4.08B | $1.66B | $11.20B |
| Year 10 | Stage 2 | $4.69B | $1.73B | $12.92B |
| Terminal | — | TV=$64.4B | PV(TV)=$23.7B (65% of EV) | EV=$36.7B |
Bull Scenario
Stage 1: 50.0% | Stage 2: 22.0% | Terminal: 3.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|
| Year 1 | Stage 1 | $0.78B | $0.71B | $0.71B |
| Year 2 | Stage 1 | $1.17B | $0.96B | $1.66B |
| Year 3 | Stage 1 | $1.75B | $1.30B | $2.96B |
| Year 4 | Stage 1 | $2.63B | $1.77B | $4.73B |
| Year 5 | Stage 1 | $3.95B | $2.40B | $7.13B |
| Year 6 | Stage 2 | $4.82B | $2.65B | $9.77B |
| Year 7 | Stage 2 | $5.88B | $2.92B | $12.70B |
| Year 8 | Stage 2 | $7.17B | $3.23B | $15.92B |
| Year 9 | Stage 2 | $8.75B | $3.56B | $19.48B |
| Year 10 | Stage 2 | $10.67B | $3.93B | $23.42B |
| Terminal | — | TV=$157.8B | PV(TV)=$58.1B (71% of EV) | EV=$81.6B |
🔲 Sensitivity Table
| WACC \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|
| 8.5% | $383 | $404 | $429 | $458 | $494 |
| 9.0% | $351 | $369 | $389 | $413 | $441 |
| 9.5% | $323 | $338 | $355 | $375 | $398 |
| 10.0% | $299 | $312 | $326 | $342 | $361 |
| 10.5% | $278 | $289 | $301 | $314 | $330 |
| 11.0% | $259 | $268 | $278 | $290 | $303 |
| 11.5% | $242 | $250 | $259 | $269 | $280 |
| 12.0% | $227 | $234 | $241 | $250 | $259 |
| 12.5% | $213 | $219 | $226 | $233 | $241 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
🏦 Comparable Valuation
| Company | Ticker | P/E (FWD) | EV/EBITDA | Rev Growth | Notes |
|---|
| Celestica | CLS | 29× | 25× | +42% | AI compute/networking EMS |
| Jabil | JBL | 16× | 11× | +5% | Diversified EMS, similar scale |
| Flex Ltd | FLEX | 16× | 9× | +8% | Diversified EMS |
| Foxconn | HNHPF | 10× | 7× | +15% | Apple-heavy EMS; AI server growing |
| Plexus | PLXS | 22× | 13× | +10% | Higher-mix EMS; good comp |
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|
| 2021 | $0.82 | — | — | — | Actual |
| 2022 | $1.46 | — | — | — | Actual |
| 2023 | $2.03 | — | — | — | Actual |
| 2024 | $3.61 | — | — | — | Actual |
| 2025 | $7.16 | — | — | — | Actual |
| 2026 | $8.18 | $9.00 | $10.12 | 17 | Estimate |
| 2027 | $11.85 | $12.97 | $16.91 | 16 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|
| 2021 | $5.6B | — | — | — | Actual |
| 2022 | $7.2B | — | — | — | Actual |
| 2023 | $8.0B | — | — | — | Actual |
| 2024 | $9.6B | — | — | — | Actual |
| 2025 | $12.4B | — | — | — | Actual |
| 2026 | $16.7B | $17.6B | $19.3B | 17 | Estimate |
| 2027 | $22.5B | $24.6B | $28.5B | 16 | Estimate |
(c) Individual Analyst Price Targets
Consensus: Avg $318.25 | Range $120–$440
| Analyst | Firm | Rating | PT | Upside |
|---|
| Michael Ng | Goldman Sachs | Strong Buy | $440 | +67.0% |
| George Wang | Barclays | Buy | $391 | +48.4% |
| Todd Coupland | CIBC | Buy | $360 | +36.6% |
| Atif Malik | Citigroup | Strong Buy | $338 | +28.3% |
| Various (8) | Others | Buy | $280 | +6.3% |
| Bear | Low estimate | Hold | $120 | -54.5% |
(e) Confidence Band Commentary
12 analysts covering CLS with high conviction. 17 analysts provide FY2026 EPS estimates (14% spread: $8.18–$10.12). Revenue consensus for FY2026 has 15% spread — modest for this stage of AI buildout. CLS has beaten EPS estimates in every quarter of FY2024 and FY2025. FY2025 actual EPS of $7.16 beat consensus of ~$6.80 by 5%. The $120 bear-case PT is an outlier — the median is $360.
💡 Investment Thesis
- AI infrastructure play at EMS margins: Celestica manufactures the physical hardware inside AI data centers — compute boards, custom switches, and server platforms. Unlike chip companies, it operates at EMS margins (8-10% EBITDA) but benefits from the volume scale of the AI buildout with manageable execution risk.
- Revenue hypergrowth: Analyst consensus expects $17.6B revenue in FY2026 (+42%) and $24.6B in FY2027 (+40%), making Celestica one of the fastest-growing large-cap EMS companies globally. This is demand-driven, not market-share-driven.
- Low leverage + aggressive buybacks: Net debt of only $181M on $30B market cap is extraordinarily conservative for an EMS company. The company repurchased $375M of stock in FY2025 (a1.2% yield) — float-shrinkage adds to per-share value.
- Strong analyst consensus: 12 analysts, 10 Buy/Strong Buy, avg PT $318 (+21% upside). Goldman Sachs maintains Strong Buy at $440.
- ATS provides defensive floor: Aerospace/defense contracts ($5.6B) provide revenue stability and margins if AI capex cycle moderates.
⚖️ DCF Verdict: Hold — Celestica Inc. (CLS)
Current price: $263.46 | Analyst Avg PT: $318.25
| Tier | Price | Action |
|---|
| Tier 1 — Starter | ≤$289 | Begin position |
| Tier 2 — Add | ≤$230 | Add on weakness |
| Tier 3 — Full | ≤$153 | Full allocation |
| Sell Alert | ≥$596 | Above fair value — consider trimming |
Accumulate — Celestica offers the most direct EMS exposure to the AI infrastructure supercycle. The stock trades at 29× FY2026 earnings — not cheap, but justified by 40%+ top-line growth. Our Base DCF value of ~$295 (+12% from current) is modestly below the analyst consensus of $318, but both support a Buy at current levels.
Initiate or add to positions in the $245–270 range. Full position at $230 or below. Primary risk: EMS margins are thin (8-10% EBITDA) and dependent on customer concentration. If a major hyperscaler brings manufacturing in-house, revenue could fall sharply. Becomes a Sell above $400 (analyst high-end target) or if AI capex guidance turns negative at any top-3 hyperscaler earnings call.
📂 Current Position Summary
| Metric | Value |
|---|
| Shares Held | 75 |
| Average Cost Basis | $132.65 |
| Current Market Value | $19,760 |
| Unrealized P&L | $+9,811 (+98.6%) |
| Annual DPS | — (not provided) |
| Annual Dividend Income | — (DPS missing) |
| Current Yield (at price) | — |
| Yield on Cost | — |
| vs Target (~$200K) | $19,760 / $200,000 (10%) |
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|
| FCF Base | Reported FY2025 FCF = $458M (3.7% FCF margin). Adjusted to $520M for DCF base, reflecting FY2025 receivables growth ($569M increase) that absorbed cash temporarily. As revenue growth normalizes from +28% to sustained levels, receivable builds moderate and FCF margin approaches 4.0-4.5%. FY2026 at $17.6B revenue × 4% FCF margin = $704M (model grows from $520M at 35%/yr is slightly more conservative). |
| WACC Build | Rf=4.3%, Beta=1.15, ERP=5.5%. Ke=10.6%. Kd=5.0%×(1-0.15)=4.25%. We=97.5%, Wd=2.5%. WACC=10.5%. Low leverage => essentially all-equity WACC. |
| Sanity Check | Base IV ~$295 vs analyst avg PT $318.25 → -7.2%. Well within ±20% threshold. Model is slightly conservative vs street — appropriate for EMS business with thin margins and customer concentration. |
| Customer Concentration | Top hyperscaler customers (believed to include Microsoft, Google, Amazon) are estimated to represent >40% of CCS segment revenue. This is both the primary upside driver and the primary risk. AI capex cuts would hit CLS hard. |
Bore Family Office • Analysis generated by Lurch • Not investment advice.
