Is Celestica Stock Safer Or Riskier Than A Year Ago

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Celestica (CLS) builds networking switches and computing gear for the largest cloud companies. Many holders bought the stock as a fast grower with little debt, a bet that lost them 25.7% in the month to October 22, 2026. In August, the company also priced a $3 billion sale of new shares, the kind of event that makes a holder look again at what they own. So does the Celestica you own today carry more risk than the one you held a year ago?

Celestica Carries Less Debt But Spends Far More

Celestica is safer on debt than a year ago, but riskier in what it has committed to. Debt fell to $810 million at June 30, 2026, from $875 million a year earlier, while cash rose to $536 million from $314 million. Over the last twelve months, operating income covered interest expense 22 times.

Celestica now spends far more on its own plants and equipment than it used to. Over the last twelve months, capital spending came to 4.0% of revenue, against 1.3% at a typical quarter end from 2011 to mid-2025. That spending took 54.7% of the cash the business brought in from operations over the same twelve months. In those earlier years, revenue barely grew: on the same measure, revenue growth at a typical quarter end was 0.55%, against 47.3% at the latest quarter end.

Why Is Celestica Spending So Much More?

Management is building capacity for programs its biggest customers have already handed it. On the July 28, 2026 call, management said the spending supports growth from programs now ramping or already awarded, planned with key customers over several years. Revenue in fiscal Q2 2026 was $4.70 billion, up 62% from a year earlier, led by 800G networking switch programs and a computing program for one of the largest cloud companies. Before the end of 2026, Celestica expects to begin deliveries of custom racks to OpenAI.

Management expects capital spending of about $1 billion in 2026 and called $1.5 billion a good placeholder for 2027. It also said customers carry part of the risk: they have placed orders for hard-to-get chips that cannot be cancelled or refunded, and some have signed binding forecasts that run 12 to 18 months.

What Do Celestica's Changes Mean For Your Money?

Despite the heavier spending, Celestica still produces more cash than a year ago. Free cash flow was $519 million over the last twelve months, up from $386 million a year earlier.

Celestica also depends on a handful of buyers: three customers each brought in 10% or more of revenue in fiscal Q2 2026, the largest of them 32%. The August sale would leave each holder with a smaller slice, since its 9,677,419 new shares equal about 8.4% of the 115 million diluted shares Celestica reported for that quarter.

A year ago, Celestica was already growing fast, but for most of its history it spent little of its own cash on plants. That no longer holds: the company now spends heavily on capacity for programs a few large cloud customers have awarded it, with less debt than before. Capital spending set against revenue is the measure to watch in Celestica's report for the quarter that ended in September.

How To Act On CLS?

Not necessarily on Celestica alone, if your goal is long-term wealth. Wealth is built by owning the companies that keep outperforming, the leaders of their industries, wherever they are. Celestica is one. Over the five years to October 2026, its stock rose 2780%, ahead of all 25 other companies in Electronic Components, where the typical company rose 40%.

Finding companies like these takes comparison across industries and sectors, and that is what the Trefis High Quality (HQ) Portfolio does. It holds 30 quality companies in equal weight and, since its inception in September 2020, has returned more than 105%, ahead of a benchmark that combines the S&P 500, S&P Mid-cap and Russell 2000. See how we find the leaders.

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