CLS Stock Today: January 23 AI Buildout vs ATS Weakness Into Q4
Celestica stock is in focus today as we weigh strong AI data center demand against softer ATS revenues before Q4 on Jan. 28. Shares of CLS closed down 6.08% to 290.93 CAD, with heavy volume and a wide intraday range. The key question for Canadian investors is whether CCS momentum can offset ATS weakness. We outline what to watch on margins, valuation, and technicals, plus how consensus views the setup into the print.
AI-driven CCS strength into Q4
Investors expect the Connectivity & Cloud Solutions unit to benefit from AI data center demand across servers, interconnects, and systems integration. Efficiency has improved, with TTM gross margin at 11.58% and operating margin at 7.19%. Inventory days sit near 75, suggesting better flow than last year. The market wants clarity on AI program ramps, shipment timing in early 2026, and whether hyperscaler orders are broadening beyond first-wave projects.
We will watch mix, utilization, and pricing signals that drive operating leverage. Return on invested capital is 20.97%, while interest coverage is 20x, giving room to invest for growth. Capex-to-revenue is a modest 1.37%, pointing to a capital-light posture. Any comments on lead times for high-speed interconnects and rack-scale systems will matter for CCS margins, as will visibility into second-half capacity adds.
ATS softness and execution risks
Advanced Technology Solutions spans aerospace and defense, industrial, energy, and healthtech, where program starts and customer budgets can shift. Recent commentary highlights potential ATS deceleration into Q4, raising the risk that it offsets CCS strength. For context on this debate, see reporting on possible ATS pressure into earnings here.
We are not modeling numbers here, but the setup implies a mixed quarter if ATS revenues lag. Solid fundamentals help: ROE is 38.5%, net margin is 6.20%, and net debt to EBITDA is 0.60x. Still, any ATS program delays, cancellations, or pricing resets could weigh on consolidated growth and Q1 outlook, even if CCS prints ahead of consensus.
Price action and technical setup
Celestica stock fell 6.08% today, trading between 273.99 CAD and 302.36 CAD, on 5.69 million shares versus a 2.82 million average. RSI sits at 49.21, showing neutral momentum. ADX is 17.58, signaling no strong trend. The Bollinger middle band is near the recent trading area, with the lower band not far below today’s low.
Price is below its 50-day average but well above the 200-day, keeping the longer trend intact. ATR is 19.93, so swings can be wide into earnings. The MACD histogram ticked slightly positive, while stochastic near 69 hints at mid-range momentum. A sustained close back above the recent range midpoint would aid sentiment; losing recent lows would raise risk.
Valuation, Street view, and Canada takeaways
Shares trade at 48.78x TTM earnings, 3.02x sales, and 16.76x book. EV/sales is 3.04x, while free cash flow yield is 0.98%, reflecting growth investment and working capital needs. Growth has been strong: revenue up 21.17% and EPS up 77.45% in FY2024. The market is paying a premium for AI exposure, so execution needs to stay solid.
The Street shows 9 Buys and 5 Holds, a consensus Buy tilt, into Jan. 28 after the close. Canadian investors should watch CCS growth, ATS trajectory, and 2025 margin guidance. For a Canada-focused backdrop on recent outperformance, see this overview from Yahoo Finance Canada here. Toronto headquarters and TSX listing make it a core domestic tech name.
Final Thoughts
Heading into Jan. 28, the setup is clear: CCS looks strong on AI data center momentum, while ATS may cool growth. Celestica stock now trades below its 50-day, with neutral momentum and elevated volatility, so position sizing matters. Our watchlist for the call: CCS bookings and margins, any ATS order pushouts, gross margin mix, working capital trends, and 2025 growth drivers. We also want guidance on supply availability for high-speed interconnects and rack-scale systems. If CCS beats and ATS is only a modest drag, multiple support could hold. If ATS softness is deeper, expect near-term pressure despite a solid long-term AI thesis.
FAQs
Is celestica stock a buy before Q4 earnings?
It depends on risk tolerance. The long-term AI case is strong, but ATS could soften near-term results. Valuation at 48.78x TTM earnings is rich, so execution needs to be clean. Consider scaling in, using stops, and waiting for the Jan. 28 commentary.
What could move celestica stock on Jan. 28?
Key drivers are CCS growth tied to AI data center demand, the size of any ATS revenue decline, margin mix, and 2025 guidance. Watch working capital and free cash flow, too. A solid CCS beat with limited ATS drag likely supports the shares.
How does AI data center demand affect Celestica’s results?
AI programs support orders for servers, interconnects, and full systems integration. This can improve utilization and margins in the CCS segment. The impact depends on shipment timing, mix, and pricing. Clear visibility on ramps and backlog conversion is crucial for sustained growth.
Why do ATS revenues matter if CCS is strong?
ATS spans aerospace, industrial, energy, and healthtech programs that add stability and diversification. If ATS slows, it can offset CCS gains and pressure consolidated growth. The Street will focus on whether any ATS softness is temporary or points to a slower start to 2026.
What technical levels should I monitor on celestica stock?
Watch the 50-day moving average as near-term resistance and the recent lows as support. RSI near 50 shows neutral momentum, and ATR near 20 implies wider swings around earnings. A close back above the recent range midpoint would be constructive.
Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.
