Celestica vs. Plexus: Which EMS Stock is a Better Bet Right Now?

An analysis of Celestica (CLS) and Plexus (PLXS), two leading EMS providers, suggests Celestica is currently the better investment option due to its AI-focused strategy and strong revenue/EBITDA growth, with Zacks estimating 2025 sales and EPS growth of 13.15% and 30.15% respectively. While Plexus has a more attractive valuation based on price/earnings ratio, Celestica has demonstrated superior price performance, gaining 112.4% over the past year compared to Plexus's 15.2%, driven by demand for its data communications and information processing infrastructure products.

Analysis

Celestica (CLS) and Plexus (PLXS) are prominent players in the electronics manufacturing services (EMS) industry, with Celestica currently exhibiting stronger growth momentum. Celestica's strategic focus on AI-driven demand for its enterprise data communications and information processing infrastructure products, including the SC6100 storage controller and DS4100 800G switch, has resulted in substantial market traction, evidenced by a 112.4% stock price increase over the past year and Zacks consensus estimates for 2025 projecting 13.15% sales growth and 30.15% EPS growth with upwardly trending EPS revisions. Financially, Celestica reports a debt-to-capital ratio of 0.37, a current ratio of 1.43, and an improving times interest earned ratio anticipated to reach 11.4 in 2025. In contrast, Plexus demonstrates robust performance in its Healthcare/Life Sciences and Aerospace/Defense segments and offers a more attractive valuation with a forward P/E ratio of 17.98 versus Celestica's 20.69. Plexus also maintains a lower debt-to-capital ratio at 0.13 and a higher current ratio of 1.53. However, Plexus contends with headwinds from softness in its Industrial sector, significant customer concentration risks, and more subdued 2025 sales growth projections of 2.64%, alongside a southward trend in its 2026 EPS estimates. While both companies possess strong liquidity, Celestica's AI-centric strategy and superior growth metrics currently position it more favorably, despite a higher valuation and geopolitical risks tied to its operations in China.

Key Decisions for Investors

• Investors might favor Celestica for its robust AI-driven growth prospects, evidenced by 13.15% projected 2025 sales growth and recent 112.4% stock appreciation, despite its premium valuation (20.69 P/E) and geopolitical exposure.
• Plexus offers a more conservative valuation at a 17.98 P/E and stronger debt metrics (0.13 debt-to-capital), but investors should weigh this against its modest 2.64% projected 2025 sales growth, customer concentration risks, and weakening 2026 EPS outlook.
• Closely monitor Celestica's execution in the competitive AI infrastructure market and its management of geopolitical risks, and for Plexus, watch for improvements in its industrial segment and progress on customer diversification before making or adjusting investment positions.