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Universal Display Corp. (OLED) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

In the latest trading session, Universal Display Corp. (OLED) closed at $180.73, marking a -1.5% move from the previous day. This move lagged the S&P 500's daily loss of 0.07%. At the same time, the Dow added 0.14%, and the tech-heavy Nasdaq lost 0.22%.

Coming into today, shares of the organic light-emitting diode technology company had lost 11.28% in the past month. In that same time, the Computer and Technology sector gained 5.05%, while the S&P 500 gained 4.58%.

OLED will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.57, up 19.27% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $84.73 million, up 9.26% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.68 per share and revenue of $381.11 million. These totals would mark changes of +116.33% and +54.04%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for OLED. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. OLED is currently a Zacks Rank #2 (Buy).

Digging into valuation, OLED currently has a Forward P/E ratio of 68.4. Its industry sports an average Forward P/E of 18.39, so we one might conclude that OLED is trading at a premium comparatively.

It is also worth noting that OLED currently has a PEG ratio of 2.28. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Electronics - Miscellaneous Components industry currently had an average PEG ratio of 1.79 as of yesterday's close.

The Electronics - Miscellaneous Components industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 228, which puts it in the bottom 11% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow OLED in the coming trading sessions, be sure to utilize Zacks.com.


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