Universal Display 4Q Numbers Beat Analysts’ Estimates; Shares Rise 3.7%

Universal Display delivered better-than-expected sales and earnings in the fourth quarter as the Organic Light Emitting Diode (OLED) technologies and materials provider saw an increase in royalty and licensing revenue.

In response, shares of Universal Display (OLED) rose 3.73% in Thursday’s extended trading session. The company posted earnings per share (EPS) of $1.13 during the fourth quarter, ahead of analysts’ expectations of $0.64.

Revenue increased ~39% year-on-year to $141.5 million, topping analysts’ estimates of $109.32 million. The increase in 4Q revenues was primarily attributable to a 98% increase in royalty and license fees.

For fiscal 2020, the company generated sales of $428.9 million, up from the $405.2 million posted in 2019. Diluted earnings per share came in at $2.80, versus $2.92 in the comparable year-ago period.

Universal Display Executive Vice President and CFO, Sidney D. Rosenblatt, said, “Agility and execution focus enabled us to continue to build upon our first mover advantage in the OLED ecosystem and we believe that we are well positioned to emerge an even stronger company when this global health crisis ends.”

Universal Display also announced a quarterly cash dividend of $0.20 per share, an increase of 33% from the previous quarter.

Looking ahead to fiscal 2021, Universal Display sees revenues landing between $530 million to $560 million. (See Universal Display stock analysis on TipRanks)

Based on commentary from Universal Display’s largest customers, on Feb. 16, Deutsche Bank analyst Sidney Ho raised the stock’s price target to $270 (13.8% upside potential) from $220 and reiterated a Buy rating.

The rest of the Street has a Moderate Buy consensus rating on the stock based on 3 Buys and 1 Sell. The average analyst price target of $223.75 implies about 5.7% downside potential from current levels. That’s after the stock has already runup ~40% over the past year.

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