Chicago, IL – February 27, 2025 – Zacks Equity Research shares Celestica Inc. CLS as the Bull of the Day and Graphic Packaging Holding Co. GPK as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Rivian Automotive RIVN and Lucid Group LCID.
Here is a synopsis of all four stocks.
Celestica Inc. is an under-the-radar picks and shovels technology stock providing investors exposure to growth across artificial intelligence, the energy transition, and beyond.
CLS stock crushed Nvidia over the past three years and the last 12 months. Yet, the recent growth and AI selloff has Celestica trading 20% below its all-time highs and 20% below its average Zacks price target.
The electronics manufacturing services powerhouse is projected to post double-digit sales and earnings growth in 2025 and 2026 to extend Celestica’s impressive run.
On top of that, Celestica trades at a discount to the Zacks Tech Sector in terms of forward earnings and sales, and it found support at a key moving average on Wednesday.
Celestica is an electronics manufacturing services standout. CLS specializes in designing, engineering, and manufacturing products for companies across various critical areas including global megatrends from AI data centers to the energy industry expansion/transition.
Celestica’s expertise across data centers, semiconductor equipment, and energy generation and storage are some of its most critical growth areas.
Celestica also benefits from the long-term upside across aerospace and defense, telecom, healthcare tech, supply chain solutions, and beyond.
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Celestica operates two reportable units: Advanced Technology Solutions (ATS) and Connectivity & Cloud Solutions (CCS).
Celestica’s services across these segments include Design and Engineering, Manufacturing Services, Logistics and Fulfillment, Precision Machining, Product Licensing Services, and beyond.
Celestica, which went public in the late 1990s, supercharged its growth over the last several years given its ability to support the key growth industries we just mentioned.
Celestica averaged 20% revenue growth between FY22-FY24 to soar from $5.6 billion in 2021 to $9.6 billion in 2024. The picks and shovels tech company’s earnings growth was staggering, averaging roughly 65% EPS expansion on a GAAP basis during that stretch.
Most recently, Celestica grew its 2024 revenue by 21%, with adjusted (non-GAAP) EPS up 58% and GAAP earnings 68% higher. The company provided upbeat guidance when it reported its Q4 results on January 29, projecting that its momentum will “continue beyond this year, and into 2026.”
“Overall, the current demand environment for data center hardware is robust, as evidenced by recent customer forecasts as well as new AI program awards over the last 90 days, including our second and third 1.6T program wins,” CEO Rob Mionis said in prepared Q4 remarks.
Celestica highlighted some of its recent big customer wins, including a “1.6 Terabyte switching program with a second Hyperscaler customer…. supporting the customer with the design and production of a fully AI-optimized networking rack.” AI Hyperscalers include Meta, Amazon, Microsoft, and other technology giants.
CLS also secured an award for a new hardware platform solutions “program with a leading Digital Native Company” to “deliver a full rack AI-optimized system solution.”
Celestica is projected to grow its revenue by 12% in 2025 and 18% in 2026 to $12.72 billion. The tech firm is expected to expand its adjusted earnings by 22% and 19%, respectively.
Celestica’s first-quarter 2025 earnings estimate jumped 12% since its release, with its FY25 outlook 7% higher. The recent upbeat earnings revisions help it land a Zacks Rank #1 (Strong Buy) and extend its stellar stretch of earnings revisions.
Celestica stock soared roughly 1,600% in the past five years, crushing the Zacks Tech sector’s 135% and its highly-ranked Electronics - Manufacturing Services industry’s 350%. More recently, CLS has ripped 834% higher in the past three years, blowing away Nvidia’s NVDA 430% and Tech’s 46%.
Celestica stock also more than doubled Nvidia during the past 12 months, up 166%. The run snapped an extended period of underperformance for Celestica, with the stock now up 990% in the past 15 years vs. Tech’s 600%.
Celestica quickly recovered from the DeepSeek AI selloff. Its strong Q4 results pushed it to new highs in early February ($144 a share). The recent growth and AI selloff heading into Nvidia’s earnings release on Wednesday has Celestica trading 22% below its all-time highs and 20% below its average Zacks price target at roughly $112 a share.
Celestica climbed on Wednesday, attempting to find support at its 50-day moving average for the second time in 2025. CLS fell from heavily overbought RSI levels in January to below neutral.
Celestica stock trades at a discount to the Zacks Tech Sector (25.8X) at 23.6X forward 12-month earnings. Its forward earnings multiple represents a 33% discount to its 10-year highs.
Celestica trades at 1.1X forward 12-month sales for a staggering 80% value vs. Tech’s 6.3X.
Graphic Packaging Holding Co. is a sustainable paper and fiber-based packaging firm that fell short of earnings expectations in early February and provided disappointing guidance.
Graphic Packaging’s recent downward earnings revisions are part of a steady decline over the last year-plus as the economy cools and inflation remains.
Graphic Packaging’s portfolio of paper packaging products are essential cogs in the economy, serving clients in industries ranging from food, beverages, and food service to personal care, household products, pets, and beyond.
GPK’s paper-based packaging solutions include folding cartons, cooking solutions, food service containers, cups, and more.
The Atlanta, Georgia-headquartered firm works with plenty of recognizable brands, and it expanded its reach in the post-Covid world through some key acquisitions.
Graphic Packaging’s purchase of AR Packaging Group in 2021 boosted its geographical reach because AR was one of Europe’s leading packaging companies.
Graphic Packaging came up against a tough to compete against stretch of growth. GPK’s revenue fell 7% in 2024 after flat 2023 sales. The paper packaging giant’s adjusted earnings dropped from $2.91 in 2023 to $2.49 a share in FY24.
Graphic Packaging’s consensus 2025 earnings estimate fell another 7% following its February 4 release, with its FY26 figure 6% lower.
The post-release downtrend lands GPK a Zacks Rank #5 (Strong Sell) and marks the extension of a negative trend that began in 2023. “The past two years have presented unusual volume challenges for the industry and our customers,” CEO Michael Doss said in prepared Q4 remarks.
“Customer destocking is largely over, but consumers are stretched and searching for value in their everyday purchases.”
Graphic Packaging stock has climbed just 14% in the past two years compared to the S&P 500’s 52% run. The benchmark has also doubled GPK stock in the last decade, despite Graphic Packaging’s 100% surge in the trailing five years.
GPK’s long-term outlook remains intact. The company also raised its quarterly dividend by 10% effective Q1 2025. Still, investors might want to stay away from Graphic Packaging until it provides upbeat earnings guidance.
California-based EV startups Rivian Automotive and Lucid Group have released their fourth-quarter 2024 results. While the EV industry is facing headwinds — ranging from high costs to potential policy shifts under a Trump presidency — electrification remains the future of transportation. With that in mind, let’s break down Rivian and Lucid’s latest results and other developments to determine if either of these stocks deserves a place in your portfolio now.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Rivian incurred a fourth-quarter 2024 loss of 52 cents per share, narrower than the Zacks Consensus Estimate of a loss of 66 cents per share as well as the year-ago period’s loss of $1.36. After missing the bottom-line estimates in the first three quarters of 2024, it finally surpassed the mark in the final quarter.
Rivian Automotive, Inc. price-consensus-eps-surprise-chart | Rivian Automotive, Inc. Quote
The company delivered a total of 14,183 vehicles in the December quarter, up from 13,972 units a year ago. Revenues of $1.73 billion also topped expectations and increased 31.9% on a year-over-year basis, fueled by higher sales of regulatory credits to other automakers, growth in software and services revenues and a rise in R1’s average selling price with the launch of Tri-Motor variant.
The biggest highlight was Rivian achieving a gross profit for the first time in the fourth quarter of 2024, thanks to improvement in cost-cutting measures, efficiency in variable and fixed costs and higher revenue per vehicle. The company managed to cut $31,000 in cost per vehicle compared with the same quarter last year. Gross profit came in at $170 million, in stark contrast to the $660 million gross loss in the fourth quarter of 2023.
Rivian had $5.29 billion in cash and cash equivalents as of Dec. 31, 2024, compared with $7.86 billion as of Dec. 31, 2023.
Lucid reported a fourth-quarter 2024 loss of 22 cents per share, narrower than the Zacks Consensus Estimate of a loss of 26 cents per share as well as the year-ago period’s loss of 29 cents per share. And with that, LCID snapped nine straight quarters of bottom-line misses.
Lucid Group, Inc. price-consensus-eps-surprise-chart | Lucid Group, Inc. Quote
Deliveries of 3,099 units in the reported quarter were up from 1,734 units in the year-ago quarter. Revenues of $234.5 million beat the Zacks Consensus Estimate of $225 million and increased 49% on a year-over-year basis, primarily driven by strong vehicle deliveries.
The gross loss narrowed to $208.8 million from $253 million in the fourth quarter of 2023 amid a revenue uptick despite an increase in costs of goods sold. Meanwhile, operating expenses kept trending higher, totaling $524 million compared with $484 million in the corresponding quarter of 2023.
Lucid had $1.61 billion in cash and cash equivalents as of Dec. 31, 2024, compared with $1.37 billion as of Dec. 31, 2023.
Rounding out 2024, Rivian’s total revenues were up 12% to $4.97 billion and net loss narrowed from $5.4 billion in 2023 to $4.74 billion.
However, RIVN provided a lower delivery forecast of 46,000 to 51,000 vehicles for 2025, down from 51,579 units delivered in 2024, taking into account potential changes in government policies, including shifts in EV incentives and tariffs under the Trump administration, which could impact demand. On the positive side, the company projects 2025 adjusted loss before interest taxes, depreciation and amortization in the band of $1.7-$1.9 billion, narrower than $2.7 billion incurred in 2024 amid continued cost efficiency.
The Zacks Consensus Estimate for Rivian’s loss per share is pegged at $2.52, narrower than $4.04 in 2024. Estimates for 2025 loss have widened by 4 cents in the past 60 days.
Lucid’s 2024 revenues were up 35.7% to $807 million and net loss marginally narrowed to $2.7 billion from $2.8 billion in 2023.
In 2025, LCID expects to produce approximately 20,000 vehicles, more than double from 9,029 vehicles manufactured in 2024. Lucid didn’t provide any delivery target.
The Zacks Consensus Estimate for LCID’s 2025 loss is pegged at 90 cents/share. This suggests an improvement from $1.22 loss incurred last year. The loss estimate, however, widened 2 cents in the past 60 days.
At their current levels, Rivian trades at 2.09X forward sales, which is a pleasant discount to Lucid’s 4.76X, although both are at premiums to the auto sector’s 1.35X.
Rivian’s $5.8 billion Volkswagen deal, finalized in the final quarter of 2024, will bring $3.5 billion in funding over the next few years to enhance its next-gen EV tech. Additionally, RIVN’s future lineup, including R2, R3 and R3X models, targets budget-conscious buyers, with R2 set for launch in the first half of 2026. The company is making notable progress in production efficiency. It expects second-gen R1 models to cut material costs by roughly 20%, while R2's material costs are about half of R1’s.
CEO RJ Scaringe sees R2 as a key growth driver, with total production costs slashed by more than half, boosting efficiency and profitability. However, cash burn, federal loan uncertainty related to the Georgia plant under Trump and intensifying competition in the EV market remain concerns.
Lucid, on the other hand, is betting on its Gravity SUV model. The company also has strong financial backing from Saudi Arabia’s Public Investment Fund, which has invested $9 billion since 2018. However, frequent capital raises have led to shareholder dilution, a key risk.
Alongside its latest results, Lucid announced the unexpected departure of CEO Peter Rawlinson. Chief operating officer Marc Winterhoff is now interim CEO. He stated that Gravity production will ramp up gradually but did not specify how many units will be produced in 2024.
Lucid also reaffirmed that "Project Midsize," its next-generation platform for at least three vehicles, will be launched in late 2026. However, rising operating expenses mean Lucid will need more external funding, raising concerns about its financial stability.
Overall, Rivian is in a stronger position with a clearer path to cost reductions and profitability. Its valuation is also more favorable. In contrast, Lucid’s cost-cutting efforts are less substantial, and its ongoing financial struggles and shareholder dilution make it a riskier bet. Given these factors, Rivian is worth holding, while Lucid is best avoided now.
RIVN currently carries a Zacks Rank #3 (Hold), while LCID is #4 Ranked (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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