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1. Company Snapshot

1.a. Company Description

Universal Display Corporation engages in the research, development, and commercialization of organic light emitting diode (OLED) technologies and materials for use in display and solid-state lighting applications.It owns, exclusively licenses, or has sole rights to sublicense approximately 5,500 issued and pending patents worldwide.The company supplies its proprietary UniversalPHOLED materials to display and lighting manufacturers, and others.


It is also involved in the research, development, and commercialization of other OLED device and manufacturing technologies, including FOLED that are flexible OLEDs for the fabrication of OLEDs on flexible substrates; OVJP, an organic vapor jet printing technology; thin-film encapsulation technology for the packaging of flexible OLEDs and other thin-film devices, as well as for use as a barrier film for plastic substrates; and UniversalP2OLED, which are printable phosphorescent OLEDs. In addition, the company provides technology development and support services, including third-party collaboration and support to third parties for the commercialization of their OLED products.Further, it provides contract research services in the areas of chemical materials synthesis research, development, and commercialization for non-OLED applications.Universal Display Corporation was founded in 1985 and is headquartered in Ewing, New Jersey.

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1.b. Last Insights on OLED

Universal Display Corporation faces challenges due to weak demand, increased competition from Micro/MiniLED and Chinese manufacturers, and client concentration, particularly reliance on LG Display. Elevated inventory levels add to forecast uncertainty. Despite a Q4 earnings beat, with EPS of $1.39 and revenue of $173M, concerns persist. A revised price target of $130/share reflects slower growth. Institutional investors, such as Numerai GP LLC, continue to invest, buying 71,257 shares. However, risks and uncertainties remain, including pricing pressure and competition.

1.c. Company Highlights

2. Universal Display Corporation's 2025 Earnings: A Strong Year with Growth Ahead

Universal Display Corporation reported record 2025 revenue of $651 million, with operating income of $249 million and net income of $242 million, or $5.08 per diluted share. The company's gross margin was 76%, indicating strong execution across the business. Earnings per share (EPS) came in at $5.08, exceeding analyst estimates. For 2026, the company expects revenue to be in the range of $650 million to $700 million, with a gross margin of 74% to 76%. The EPS for the fourth quarter was $1.39, beating estimates of $1.28.

Publication Date: Feb -22

📋 Highlights

Financial Performance and Guidance

The company's 2025 financial results were driven by strong demand for OLED materials and technologies. Brian Millard, Chief Financial Officer, discussed the company's expectations for 2026, including a revenue growth rate of 4% year-over-year. The company's guidance for 2026 is based on industry growth and customer forecasts, with a midpoint of $675 million. The expected ratio of materials to royalty and licensing revenues is 1.3:1.

OLED Industry Trends and Company Positioning

Universal Display remains at the forefront of the OLED industry's evolution, with its materials and technologies playing a central role in OLED innovation. The company is investing in R&D efforts, strengthening its intellectual property framework, and deepening engagement with customers across the OLED ecosystem. As the OLED industry enters a new phase, marked by broader applications and higher performance expectations, Universal Display is well-positioned to benefit.

Valuation and Return Metrics

With a P/E Ratio of 20.45 and an EV/EBITDA of 15.63, the company's valuation multiples indicate a premium for its growth prospects. The company's Return on Equity (ROE) is 14.07%, and Return on Invested Capital (ROIC) is 11.07%, indicating strong profitability. The Dividend Yield is 1.73%, providing a relatively stable return for shareholders. Analysts estimate next year's revenue growth at 10.3%, which may justify the current valuation multiples.

Blue Revenue and Commercialization Pathway

Brian Millard discussed the company's expectations for blue revenue, stating that it is developmental in nature and may not be the only or primary way to measure progress. The company expects blue revenues to be around $4 million to $5 million for 2026. The progress of blue is largely in the customers' hands, and the company's work continues in developing and inventing new materials that help open more doors for them.

3. NewsRoom

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Aquatic Capital Management LLC Boosts Stake in Universal Display Corporation $OLED

Mar -17

Source: defenseworld.net

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23,805 Shares in Universal Display Corporation $OLED Acquired by Cinctive Capital Management LP

Mar -16

Source: defenseworld.net

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OLED Stock Down 35% This Past Year, but One Fund Invested $9 Million More Anyway

Mar -11

Source: fool.com

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LG Display and Universal Display Corporation Strengthen Two-Decade OLED Partnership with Extended Long-Term Agreements

Feb -26

Source: businesswire.com

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Universal Display: Weak Demand Hurts Growth

Feb -25

Source: seekingalpha.com

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Universal Display Corporation Announces Participation at Upcoming Conferences

Feb -23

Source: businesswire.com

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OLED's Q4 Earnings Beat Estimates, Revenues Rise Y/Y

Feb -20

Source: zacks.com

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Universal Display Corporation (OLED) Q4 2025 Earnings Call Transcript

Feb -20

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (11.27%)

6. Segments

Organic Light Emitting Diode

Expected Growth: 10.93%

Universal Display Corporation's Organic Light Emitting Diode (OLED) growth is driven by increasing adoption in premium smartphones, expanding use in TVs and wearables, and rising demand for energy-efficient displays. Additionally, partnerships with leading OEMs, continuous R&D investments, and growing presence in emerging markets contribute to the 10.93% growth.

Royalty and License Fees

Expected Growth: 11.7%

The 11.7% growth in Royalty and License Fees from Universal Display Corporation is driven by increasing adoption of OLED technology in premium smartphones, growing demand for OLED TVs, and rising patent licensing revenue from major display manufacturers such as Samsung and LG.

Contract Research Services

Expected Growth: 11.7%

The 11.7% growth in Contract Research Services from Universal Display Corporation is driven by increasing demand for OLED displays in smartphones and TVs, expansion into new markets such as automotive and virtual reality, and rising adoption of OLED technology in emerging markets.

7. Detailed Products

OLED Emitters

Organic compounds that emit light when an electric current is applied, used in OLED displays

Phosphorescent Emitters

Organic compounds that emit light over a longer period of time, used in OLED displays

Host Materials

Organic compounds that help to stabilize and transport electrical charge in OLED displays

Transport Layer Materials

Organic compounds that help to transport electrical charge in OLED displays

OLED Display Panels

Complete OLED display panels used in various applications

OLED Lighting

OLED-based lighting solutions for general lighting applications

8. Universal Display Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Universal Display Corporation is medium due to the presence of alternative technologies such as LCD and OLED. However, the company's proprietary OLED technology provides a competitive advantage.

Bargaining Power Of Customers

The bargaining power of customers is low due to the specialized nature of Universal Display Corporation's products and the lack of alternative suppliers.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium due to the presence of multiple suppliers for raw materials and components. However, the company's dependence on a few key suppliers for critical components increases their bargaining power.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the OLED industry, including significant capital expenditures and technological expertise.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of established competitors such as Samsung and LG, and the ongoing competition for market share and technological advancements.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 4.92%
Debt Cost 3.95%
Equity Weight 95.08%
Equity Cost 11.16%
WACC 10.81%
Leverage 5.18%

11. Quality Control: Universal Display Corporation passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Growth: 3.2

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Momentum: 2.5

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Universal Display

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Volatility: 5.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

94.72$

Current Price

94.72$

Potential

-0.00%

Expected Cash-Flows