The technology industry is evolving rapidly, with the adoption of digital solutions and the growing demand for automation across almost every industry. As a result, artificial intelligence and robotics have been the subject of much buzz over the past few years and…
are expected to remain notable sectors in the near future.
Companies are investing substantially in tech upgrades to keep pace with a growing digitization trend. “Technology spending is entering a new build budget phase,” according to John-David Lovelock, distinguished research vice president at Gartner. In addition, Forrester revised up its U.S. Tech market outlook for 2021. The organization forecasts the U.S. tech market will expand 7.4% in 2021, up from its previous 6% estimate.
Given the industry’s solid growth prospects, Wall Street analysts expect tech stocks Celestica Inc. (CLS – Get Rating) and Lantronix, Inc. (LTRX – Get Rating), which are trading at less than$10, to rally by more than 25% soon.
CLS in Toronto, Canada, provides hardware platforms and supply chain solutions in North America, Europe, and Asia. It operates through two segments, Advanced Technology Solutions; and Connectivity & Cloud Solutions.
On September 21, CLS agreed to acquire PCI Limited, a fully integrated design, engineering, and manufacturing solutions provider. The acquisition should strengthen CLS’ approach to engineering-focused engagements, while also enhancing its financial profile.
On July 29, CLS opened its AbelConn Electronics facility in Maple Grove, USA. “The new Maple Grove facility enables us to extend the same capabilities and expertise in design, manufacturing, and achieving regulatory compliance to our HealthTech, Industrial and Smart Energy customers,” said Jack Lawless, President, Advanced Technology Solutions, Celestica.
For its fiscal second quarter, ended June 30, CLS’s non-IFRS adjusted gross profit increased 7% year-over-year to $119.40 million. Its non-IFRS adjusted net earnings stood at $37.90 million, up 19.6% from the same period last year. Its non-IFRS adjusted earnings per share grew 20% from its year-ago value to $0.30.
A $1.47 billion consensus revenue estimate for its fiscal fourth quarter (ending December 2021) represents a 6.2% increase year-over-year. The Street expects the company’s EPS to rise 23.1% from the current quarter to $0.32 in the next quarter. CLS has an impressive earnings surprise history also; it beat the consensus EPS estimates in each of the trailing four quarters.
Over the past year, the stock has gained 11.7% in price to close yesterday’s trading session at $8.05. The $10.06 median price target indicates a potential 25% upside from its last closing price. The 12-month price targets range from a low of $9.25 to a high of $11.00.
CLS has an overall B rating, which translates to Buy in our proprietary POWR Ratings system. The POWR Ratings are calculated considering 118 distinct factors, with each factor weighted to an optimal degree.
CLS has an A grade for Value, and a grade of B for Sentiment. It is ranked #18 of the 74 stocks in the Technology – Services industry.
Click here to view additional CLS ratings for Growth, Momentum, Quality, and Stability.
LTRX provides software as a service (SaaS), engineering services, and hardware for edge computing, the Internet of Things (IoT), and remote environment management (REM) in the Americas, Europe, the Middle East, Africa, and the Asia Pacific Japan. LTRX is headquartered in Irvine, Calif.
On August 19, LTRX introduced a new…
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