Rating Change #9
Universal Display Corporation
has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and premium valuation.
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Highlights from the ratings report include:
- PANL's very impressive revenue growth greatly exceeded the industry average of 3.7%. Since the same quarter one year prior, revenues leaped by 166.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- PANL has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 17.19, which clearly demonstrates the ability to cover short-term cash needs.
- PANL's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 33.63%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
Universal Display Corporation engages in the research, development, and commercialization of organic light emitting diode (OLED) technologies and materials for use in flat panel display, solid-state lighting, and other product applications. The company has a P/E ratio of 73.4, below the average computer hardware industry P/E ratio of 78.3 and above the S&P 500 P/E ratio of 17.7. Universal Display has a market cap of $1.64 billion and is part of the
industry. Shares are down 4% year to date as of the close of trading on Friday.
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