Investing.com -- CLS (NASDAQ: CLS) shares fell 15.14% Thursday despite reporting first quarter results that exceeded analyst expectations, as the stock's recent rally left limited upside following the print.

The company posted revenue of $4.05 billion, up 53% YoY, matching analyst estimates of $4.0 billion. Earnings per share of $2.16 rose 80% YoY, beating the consensus estimate of $2.08.

Gross margins came in at 11.3% in the quarter, slightly below analyst expectations of 11.6%, though operating margins exceeded forecasts by 9 basis points. The company's CCS and ATS revenue aligned with expectations, while ATS business remained relatively flat YoY with margins improving to 6% from 5% in the first quarter of fiscal 2025. HPS revenues reached $1.7 billion, growing from $1.4 billion in the fourth quarter.

Three customers represented over 10% of revenue, which Barclays analysts believe are Alphabet, Meta, and Amazon at 35%, 15%, and 15% of revenue, respectively. "We are waiting for more details on the call tomorrow. The company mentioned the outlook for 2027 continues to strengthen from 90 days ago. We expect to hear more color around the CPO switch win, margins, and more guidance on the earnings call, which will take place tomorrow at 8am EST," Barclays analysts commented.

Mizuho analysts suggested the decline reflected valuation concerns following the stock's recent gains. "Feels like a good reminder to everyone to be careful. CLS hosts their conf call today as does GLW and expect both to signal continued strength and strong bookings / demand from key customer segments. These names just got all bid up to levels where the forward RISK vs REWARD WAS NO LONGER SUPER COMPELLING. Makes you wonder into AMD and KLAC results as well as SNDK and the HDD mfrs," Mizuho analysts commented.