Celestica is Wednesday's pick for IBD 50 Growth Stocks To Watch as shares have reached a buy point and a new high.
The stock rebounded more than 6% Wednesday and recouped Tuesday's 3.75% drop. The technology solutions stock has climbed an impressive 80% so far this year, but an indicator shows it may not be finished yet.
The IBD 50 name provides design, manufacturing and supply chain solutions. Its customers are in the enterprise, aerospace and defense, health, communications, sustainable energy and data center industries.
It ranks No. 1 out of 17 stocks in the Electronics-Contract Manufacturing group, which holds the 13th spot out of the 197 industry groups that Investor's Business Daily tracks.
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Celestica Stock Hits A Buy Point
After a long run, the stock took time to digest the new higher level and formed a three-weeks-tight pattern. Celestica is one of several IBD 50 names that recently formed that bullish pattern, identified by MarketSurge pattern recognition.
The formation has a 165.83 buy point. The entry can be a place to add to an existing position, though investors can use it to make an initial purchase.
Celestica stock reached the entry point and hit an all-time high Wednesday. Shares are in a buy zone up to 174.12.
The stock tested its 21-day exponential moving average Tuesday, finding support. Its relative strength line has been steadily rising from its April lows, as has its 50-day moving average.
Celestica stock has outperformed 98% of stocks that IBD tracks. And its IBD Timeliness Rating of A, indicates the stock has a potential for positive relative price performance over the next 12 months. Its 1.7 up/down volume ratio shows positive demand over the last 50 days.
Meanwhile, its IBD Accumulation/Distribution Rating of B shows moderate institutional buying over the last 13 weeks. Mutual funds have increased their positions in Celestica stock, with 1,034 owning shares in June, up from 962 in March and 750 in December.
Profit Growth Has Been Steady
Its rate of profit growth has slipped from 73% to 45% over the last four quarters, with more deterioration expected. Analysts predict 36% profit growth for the second quarter, while full-year 2025 earnings forecasts have recently been revised up to 31%.
Its sales increases are projected to ramp up from 12% in the second quarter to 16% over the following four quarters.
Celestica reports its second-quarter results Monday after the market close.
The company has been a steady profit grower as seen in its Earnings Stability factor of 6 out of 99 possible — with a lower number being better.
Lastly, it holds best-possible scores of 99 in both its Composite Rating and Earnings Per Share Rating.
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