Celestica Inc (NYSE:CLS) Offers Strong Growth and Technical Breakout Potential for Investors

Investors looking for high-growth opportunities often search for stocks that blend solid fundamental growth measures with positive technical patterns. One method involves finding companies with strong earnings and revenue growth while also showing technical breakout setups, a strategy designed to identify momentum early in a stock’s rise. Celestica Inc (NYSE:CLS) appears as a strong option for this approach, displaying both improving financial results and a promising technical setup.

The Importance of Growth and Technical Breakouts

Growth investing targets companies expected to grow revenue and earnings faster than their peers, as outlined in our introduction to growth investing. When these fundamentals match a stock breaking out of a consolidation or resistance level, it often indicates institutional interest and the chance for continued upward movement. This dual approach—mixing fundamental strength with technical signals—helps identify stocks with better odds of ongoing success.

Celestica’s Fundamental Advantages

Celestica’s fundamental analysis report points to several growth and profitability measures that set it apart:

• Strong Growth Metrics: Over the last year, CLS posted a 51.06% jump in earnings per share (EPS) and a 21.05% rise in revenue. Future estimates indicate further growth, with EPS projected to climb by 24.42% yearly.
• Solid Profitability: The company holds an 8/10 Profitability Rating, supported by high return figures (ROE of 27.13% and ROIC of 17.26%), both ranking among the best in its industry.
• Fair Valuation: Despite its growth, CLS trades at a PEG ratio that implies a reasonable valuation compared to its earnings path. Its forward P/E of 29.24 is also below the S&P 500 average.

These fundamentals match the key traits of growth stocks, such as operating in growing markets (like cloud solutions and advanced technology) and staying competitive through innovation.

Technical Breakout Signals

Celestica’s technical analysis report shows a stock in a steady uptrend with recent consolidation near record highs:

• Trend Momentum: Both short- and long-term trends are upward, with the stock performing better than 98% of the market over the past year. It sits above all major moving averages (20-day, 50-day, 100-day, and 200-day), reflecting consistent bullish momentum.
• Breakout Potential: CLS is testing the top of a one-month range ($144.27–$173.63), with little resistance above. A recent Pocket Pivot signal—a price jump backed by higher volume—hints at institutional buying.
• Support Zones: A clear support area lies between $159.55 and $162.88, backed by moving averages and trendlines, providing a sensible spot for stop-loss orders.

Why This Pairing Is Effective

The combination of Celestica’s fundamental growth and technical breakout pattern lessens the need to rely on just one type of analysis. Strong earnings growth supports the technical momentum, while the breakout suggests the market expects more gains. This mirrors past examples like Amazon and Netflix, where early breakouts aligned with improving fundamentals.

Finding More Opportunities

For investors seeking other high-growth, technically strong stocks, our Strong Growth Stocks with Good Technical Setup Ratings screen offers a selected list of stocks meeting these criteria.

Disclaimer: This analysis is not investment advice. Always do your own research or consult a financial advisor before making investment decisions.