Celestica’s Stock Plummets 8.28% on $780M in Volume Ranking 103rd Despite Strong Earnings and Raised Guidance as High P/E and Bearish Options Signal Investor Divergence

Celestica’s stock fell 8.28% on August 29, 2025, with a trading volume of $0.78 billion, ranking 103rd in market activity for the day. The decline came despite strong second-quarter results, including $2.9 billion in revenue and adjusted EPS of $1.39, both exceeding expectations.

The company’s Connectivity & Cloud Solutions segment drove growth, with revenue rising 28% year-over-year to $1.2 billion, fueled by demand for AI infrastructure hardware. Net income doubled to $211 million, while free cash flow guidance was raised to $400 million for the year. Management also increased full-year revenue forecasts to $11.6 billion and adjusted EPS targets to $5.50, reflecting confidence in sustained customer demand.

Despite these fundamentals, short-term volatility emerged as investors weighed valuation concerns. Celestica’s forward P/E ratio of 38.26 exceeds its industry average of 21.23, raising questions about its premium pricing. Analysts noted recent upgrades in price targets to $225–$240, but institutional buying activity and options trading suggested mixed positioning, with bearish options activity intensifying ahead of earnings.

Historical backtesting of Celestica’s performance showed a total return of 687% from 2015 to 2025, with an annualized return of 27.5%. However, the strategy faced a maximum drawdown of -66.4% and an average trade return of 0.71%, indicating high volatility and risk. This aligns with the recent sharp selloff, where the stock dropped from a 52-week high of $218.8 to $197.56, despite strong cash flow and earnings momentum.