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Why Is Universal Display (OLED) Up 3.8% Since Last Earnings Report?

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A month has gone by since the last earnings report for Universal Display Corp. (OLED - Free Report) . Shares have added about 3.8% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Universal Display due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Universal Display Q4 Earnings Beat, Revenues Up Y/Y

Universal Display reported fourth-quarter 2021 earnings of 96 cents per share, which beat the Zacks Consensus Estimate by 2.1% but decreased 15% year over year.

Fourth-quarter total revenues grew 3.3% year over year to $146.2 million, driven by solid demand for organic light-emitting diode (OLED - Free Report) products. The top line surpassed the Zacks Consensus Estimate by 3.4%. In 2021, revenues increased 29.1% year over year to $553.5 million.

Quarterly Segment Details

Material sales (58.6% of total revenues) surged 37.1% year over year to $85.8 million. Royalty and license fees (38.3%) were down 43.5% to $56 million. Contract research services (3.1%) were $4.5 million, up 13.3%.

Gross profit was $114 million, down from $114.5 million in the year-ago quarter. Operating expenses of $57.5 million climbed 18%. Universal Display reported operating income of $56.5 million, down 14.1%.

Liquidity

In 2021, the company generated $191.1 million of cash from operating activities compared with $148.8 million in 2020. As of Dec 31, 2021, it had cash and cash equivalents of $312 million and $120.9 million of current deferred revenues.

Guidance

For 2022, Universal Display expects revenues between $625 million and $650 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision.

The consensus estimate has shifted 7.67% due to these changes.

VGM Scores

At this time, Universal Display has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Universal Display has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.


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