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Universal Display (OLED)
NASDAQ:OLED
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Universal Display
(NASDAQ:OLED)73Outperform
Positive Factors
Commercialization
Management reiterated that commercialization of the blue phosphorescent material is closer than ever.
Dividend Increase
A 13% dividend increase underscores UDC confidence in future FCF growth.
Negative Factors
Revenue Outlook
Disappointing outlook for 2025 provided by UDC despite better-than-expected Q4 revenues.
Universal Display (OLED) vs. S&P 500 (SPY)
Market Cap
$7.13B
Dividend Yield1.06%
Average Volume (3M)768.73K
Price to Earnings (P/E)32.3
Beta (1Y)1.40
Revenue Growth12.36%
EPS Growth9.70%
CountryUS
Employees468
SectorTechnology
Sector Strength48
IndustryHardware & Equipment
Share Statistics
EPS (TTM)4.65
Shares Outstanding47,469,086
10 Day Avg. Volume826,956
30 Day Avg. Volume768,727
Financial Highlights & Ratios
PEG Ratio3.33
Price to Book (P/B)N/A
Price to Sales (P/S)11.00
Price to Cash Flow (P/CF)51.30
P/FCF Ratio80.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$186.86Price Target Upside16.98% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Universal Display Business Overview & Revenue Model
Company DescriptionUniversal Display Corporation (OLED) is a leader in the organic light-emitting diode (OLED) industry, specializing in the development and commercialization of OLED technologies and materials. Operating primarily in the technology and materials sectors, the company is known for its proprietary UniversalPHOLED phosphorescent OLED technology, which enhances the efficiency and performance of OLED displays and lighting solutions.
How the Company Makes MoneyUniversal Display Corporation generates revenue primarily through licensing its proprietary OLED technologies and selling high-performance OLED materials to manufacturers of OLED displays and lighting products. The company licenses its UniversalPHOLED technology to major display and lighting manufacturers, enabling them to produce more energy-efficient and effective OLED products. Additionally, Universal Display sells its patented OLED materials, such as phosphorescent emitters, directly to these manufacturers, further driving its revenue. Significant partnerships with leading display and electronics companies, along with a robust patent portfolio, play a crucial role in sustaining the company's revenue streams.
Universal Display Financial Statement Overview
Summary
Universal Display exhibits strong financial health with high profitability, a robust balance sheet, and solid cash flow generation. The company has successfully increased revenue and maintained high margins, benefiting from a debt-free balance sheet which reduces financial risk. While cash flow growth is modest, the strong conversion of net income to cash provides a solid foundation for future growth.Income Statement
The income statement reflects strong profitability with a net profit margin of 34.28% and a gross profit margin of 77.08% for 2024. Both margins indicate efficient cost management, allowing the company to retain a significant portion of its revenue as profit. Revenue growth was 12.36% from 2023 to 2024, showing a positive growth trajectory. The EBIT and EBITDA margins are robust at 36.86%, suggesting solid operational efficiency.85
Very Positive
Balance Sheet
The balance sheet is healthy, characterized by a debt-free status as of 2024, which eliminates financial leverage risks. The equity ratio is strong at 88.20%, indicating a solid capital structure where most assets are funded by equity. The return on equity is impressive at 13.74%, reflecting effective use of shareholder funds to generate profits.90
Very Positive
Cash Flow
The cash flow statement shows a significant increase in operating cash flow from $154.78 million in 2023 to $253.74 million in 2024, indicating improved cash generation from core activities. The free cash flow to net income ratio is 0.95, suggesting efficient conversion of profits into cash flow. However, free cash flow growth is slightly negative due to changes in capital expenditures.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 647.68M | 576.43M | 616.62M | 553.52M | 428.87M | Gross Profit |
| 499.22M | 441.05M | 488.72M | 438.53M | 343.39M | EBIT |
| 238.80M | 217.19M | 267.11M | 227.64M | 157.53M | EBITDA |
| 238.80M | 260.59M | 309.38M | 269.61M | 194.71M | Net Income Common Stockholders |
| 222.08M | 203.01M | 210.06M | 184.21M | 133.37M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 492.67M | 514.12M | 577.77M | 663.19M | 730.01M | Total Assets |
| 1.83B | 1.67B | 1.53B | 1.47B | 1.27B | Total Debt |
| 19.14M | 22.86M | 29.04M | 27.26M | 8.75M | Net Debt |
| -79.84M | -69.13M | -64.39M | -284.73M | -621.26M | Total Liabilities |
| 215.81M | 221.74M | 257.45M | 367.00M | 356.51M | Stockholders Equity |
| 1.62B | 1.45B | 1.28B | 1.10B | 912.71M |
| Cash Flow | Free Cash Flow | |||
| 211.10M | 28.42M | 79.61M | 147.55M | 120.74M | Operating Cash Flow |
| 253.74M | 154.78M | 126.81M | 191.10M | 148.79M | Investing Cash Flow |
| -164.41M | -83.29M | -280.74M | -457.75M | 391.26M | Financing Cash Flow |
| -82.33M | -72.93M | -64.64M | -51.37M | -41.66M |
Universal Display Technical Analysis
Positive
159.74
Price Trends
149.04
Positive
162.64
Negative
180.79
Negative
Market Momentum
1.47
Negative
59.49
Neutral
49.69
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OLED, the sentiment is Positive. The current price of 159.74 is above the 20-day moving average (MA) of 149.57, above the 50-day MA of 149.04, and below the 200-day MA of 180.79, indicating a neutral trend. The MACD of 1.47 indicates Negative momentum. The RSI at 59.49 is Neutral, neither overbought nor oversold. The STOCH value of 49.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for OLED.
Universal Display Risk Analysis
Universal Display disclosed 31 risk factors in its most recent earnings report. Universal Display reported the most risks in the “Tech & Innovation” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Universal Display Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Performance Comparison
OLED
Universal Display
159.74
-7.43
-4.44%
COHR
Coherent Corp
66.54
5.05
8.21%
LITE
Lumentum Holdings
62.11
15.24
32.52%
Universal Display Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: 8.42% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
Universal Display Corporation reported record-breaking revenues and made significant progress in phosphorescent blue development, with strong OLED market growth projections and new capacity investments. However, restructuring costs, foreign currency losses, and uncertainty in consumer demand present challenges.Highlights
Record-Breaking Revenue and Earnings
Universal Display Corporation reported record revenues of $648 million and net income of $222 million for Fiscal Year 2024, representing a 12% year-over-year growth.
Phosphorescent Blue Development Progress
The company is nearing commercialization of phosphorescent blue, expected to increase OLED display energy efficiency by up to 25%, with development timelines now measured in months rather than years.
Strong OLED Market Growth Projections
OLED smartphone displays are expected to grow from 784 million units in 2024 to 952 million units by 2029, and OLED IT displays are projected to quadruple within the same timeframe.
New OLED Capacity Investments
Significant investments in new OLED capacity include Samsung's $3 billion and BOE's $9 billion investments in new Gen 8.6 fabs, contributing to an expected 10% increase in installed OLED capacity by end-2025 over 2023.
Lowlights
Restructuring Costs Impact Earnings
The fourth quarter of 2024 included $8.9 million of restructuring costs related to the planned closure of the OVJP California location, impacting EPS by $0.15.
Foreign Currency Exchange Losses
The company recorded $7.2 million of foreign currency exchange losses related to a tax receivable denominated in Korean won, impacting EPS by $0.12.
Uncertain Consumer Electronics Demand
The 2025 revenue guidance reflects uncertainty in consumer electronics demand, contributing to a projected slower growth rate compared to 2024.
Company Guidance
During the call, Universal Display Corporation provided guidance for 2025, projecting revenues in the range of $640 million to $700 million. The company expects the ratio of materials to royalty and licensing revenues to be approximately 1.4:1. Total gross margins are anticipated to remain in the range of 76% to 77%. Operating expenses are projected to grow at a low-single-digit percentage, with R&D expenses remaining flat and SG&A expenses increasing by 10% to 15%. The operating margins are expected to be between 35% and 40%, and the effective tax rate is forecasted to be around 19%. Additionally, Universal Display announced an increase in their quarterly cash dividend to $0.45 per share, reflecting confidence in future growth opportunities.Universal Display Corporate Events
Executive/Board Changes
Universal Display Expands Board with New Appointment
Positive
Dec 17, 2024
Universal Display Corporation announced the appointment of April E. Walker to its Board of Directors, effective January 1, 2025, expanding the board to 11 members. Ms. Walker, a global leader in the technology industry with over 30 years of experience in AI, cybersecurity, and digital innovation, is expected to enhance the board’s expertise, bolstering the company’s leadership in the OLED ecosystem.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.