Universal Display (OLED) Moves 3.0% Higher: Will This Strength Last?

Universal Display Corp. (OLED) shares ended the last trading session 3% higher at $129.53. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 0.2% loss over the past four weeks.

The uptrend was largely buoyed by Universal Display’s research and development initiatives that always focus on developing next-generation green, red and yellow emitter materials and other solutions tailored to clients’ evolving specifications. By collaborating closely with customers, it delivers OLED technologies that support its evolving product roadmaps. This flexibility and customer-oriented approach foster brand loyalty and a significant competitive edge for the company.

The expanding automotive industry also offers lucrative opportunities. Major automakers such as Audi, Lotus and Zeekr have already introduced car models with OLED screens. A few of the models also deployed OLED taillights. OLED displays are lightweight, thin, easily bendable and rollable. Its high degree of conformability offers greater design flexibility and excellent picture clarity needed for automotive applications. Management expects the IT market to be the key growth driver in the near term. Expanding markets of consumer electronics (including AI PCs, OLED AR/VR devices, smartwatches, smartphones and TVs) will drive growth in the long term.

This organic light-emitting diode technology company is expected to post quarterly earnings of $1.28 per share in its upcoming report, which represents a year-over-year change of +4.9%. Revenues are expected to be $173.25 million, up 6.8% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Universal Display, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on OLED going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Universal Display is a member of the Zacks Electronics - Miscellaneous Components industry. One other stock in the same industry, Vicor (VICR), finished the last trading session 1% lower at $157.43. VICR has returned 14.3% over the past month.

For Vicor, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.38. This represents a change of +65.2% from what the company reported a year ago. Vicor currently has a Zacks Rank of #3 (Hold).

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This article originally published on Zacks Investment Research (zacks.com).

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