OLED Stock Study (10-7-26)

Posted by Mark on October 7, 2026 at 12:19 | Last modified: October 7, 2026 12:27

I recently studied Universal Display Corp. (OLED, $79.66). Previous studies are here and here.

M* writes:

     > Universal Display Corp researches, develops and manufactures
     > organic light-emitting diode, or OLED, technologies for use
     > in displays for mobile phones, tablets, televisions, wearables,
     > personal computers, automotive interiors, and the solid-state
     > lighting market. OLED technologies are an alternative to a
     > light-emitting diode, or LED, technologies, in the solid-state
     > lighting market, and liquid crystal displays in the flat-panel-
     > display market. A large majority of the firm’s revenue is
     > generated in South Korea, with the rest coming from Japan,
     > China, the United States, and other countries across the world.

Over the past decade, this small-size company grows sales and earnings 13.6% and 18.1%/year, respectively. Lines are mostly up, straight, and parallel except for sales+EPS dips in ’18 and ’23 and an EPS dip in ’20. Ten- (5-) year earnings R^2 is 0.81 (0.87) and VL gives an Earnings Predictability score of 80. Shares outstanding increase 2.6% (0.3%/year).

Over the past decade, PTPM leads peer and industry averages while ranging from 26.0% in ’18 to 45.3% in ’25 with a last-5-year mean of 42.9%. ROE leads peer averages but trails the industry while ranging from 8.7% in ’18 to 17.8% in ’21 with a last-5-year mean of 15.5% (shareholder equity consistently positive and growing 14.3% per year). Debt-to-capital is less than peer and industry averages with a last-5-year mean of 1.7%.

Quick ratio is 5.4 and interest coverage N/A per M* who assigns “Narrow” Economic Moat and a B grade for Financial Health (per BI website). VL gives an A grade for Financial Strength and reports zero debt.

RightStock—a new tool on the BI website that I am tracking for informational purposes—gives a fitness score of 77 (“moderate fit”) and opportunity score of 100 (“excellent”).

With regard to sales growth:

• YF gives YOY ACE 3.1% contraction and 7.9% growth for ’26 and ’27 (based on 8 analysts).
• Zacks gives YOY ACE 3.1% contraction and 8.7% growth for ’26 and ’27 (3 analysts).
• VL projects 13.0% growth per year from ’25-’30.
• CFRA projects 3.2% contraction YOY and 2.4% growth per year for ’26 and ’25-’27, respectively.
• M* gives a 2-year ACE of 2.7% growth per year.

My 2.0% forecast is lower portion of the range.

With regard to EPS growth:

• MarketWatch gives ACE 2.4%/year contraction and 5.2%/year growth for ’25-’27 and ’25-’28 (based on 11 analysts).
• Nasdaq.com gives ACE 15.1% YOY and 11.0% growth/year for ’27 and ’26-’28 [4 / 4 / 1 analyst(s) for ’26 / ’27 / ’28].
• Seeking Alpha projects 4-year annualized growth of 6.2%.
• Finviz gives 5-year annualized ACE of 4.2% growth (6).
• YF gives ACE growth YOY 5.1% and 4.2% for ’26 and ’27, respectively (6).
• Zacks gives ACE YOY 17.9% contraction and 15.1% growth for ’26 and ’27, respectively (4).
• VL projects 5.8% growth per year from ’25-’30.
• CFRA projects contraction of 17.9% YOY and 1.6% per year for ’26 and ’25-’27, respectively.

My 4.0% per year forecast is below the long-term-estimate range (mean of three: 5.4%). Initial value is 2026 Q2 EPS of $4.13/share rather than ’25 EPS of $5.08 (TTM).

My Forecast High P/E is 32.0. Over the past 10 years, high P/E falls from 72.7 to 32.3 (’25) with last-5-year mean of 47.6 and a last-5-year-mean average P/E of 37.1. I am below the range.

My Forecast Low P/E is 20.0. Over the past 10 years, low P/E falls from 39.6 to 20.4 (’25) with a last-5-year mean of 26.6. I am forecasting below the range.

My Low Stock Price Forecast (LSPF) of $61.90 is default based on initial value from above: 22.3% less than previous close and 15.4% less than the 52-week low.

Over the past nine years, payout ratio (PR) increases from 5.5% to 35.4% (’26) with a last-5-year mean of 30.2%. My 5.0% forecast is below the range.

These inputs land OLED in the BUY zone with a U/D ratio of 4.6. Total Annualized Return (TAR) is 15.2%.

PAR (using Forecast Average—not High—P/E) of 8.4% is less than I seek for a small-size company. If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR instead.

To assess MOS, I start by comparing my inputs with those of Member Sentiment (MS). Based on only 28 studies over the last 90 days (my study and 11 other outliers excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and PR are 5.2%, 5.8%, 30.0, 18.3, and 26.9%, respectively. My P/E range is higher. VL projects a future average P/E of 22.0 that is less than MS (24.2) and less than mine (26.0).

MS high / low EPS are $5.80 / $4.13 versus my $5.02 / $4.13 (per share). My high EPS is less due to a lower growth rate. VL high EPS of $6.75 is greater than both.

MS LSPF of $69.80 implies a Forecast Low P/E of 16.9: lower than the above-stated 18.3. MS LSPF is 7.7% less than the default $4.13/share * 18.3 = $75.58 resulting in more conservative zoning. MS LSPF is still 12.8% greater than mine.

MOS is strong in the study because despite a higher P/E range, other inputs are less than historical/analyst estimates/ranges. MS TAR is 0.2%/year less than mine because 36% of MS studies use Forecast High P/E of 25 or less. Given persistent fundamental headwinds I can’t say that’s unreasonable, but it’s far less than anything seen in the historical record.

With regard to valuation, PEG is 17.5 and 4.6 per M* and my projected P/E: probably overvalued but distorted (i.e. N/A?) due to a low growth rate. Relative Value [(current P/E) / 5-year-mean average P/E] is fire-sale cheap at 0.52. “Quick and dirty” cash flow (excluding capex, which Google AI says is wrong) has stock undervalued by 41%. M* reports stock at 23% discount.

Per U/D, OLED is a BUY right now under $86/share. Given forecast high price ~$161, [160.6 / ((14.67 / 100 ) +1 ) ^ 5] = $81 meets the BetterInvesting® TAR criterion.

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