Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model NEW YORK ( TheStreet) -- Universal Display Corporation (Nasdaq: PANL) has been upgraded by TheStreet Ratings from hold to buy. 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, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.
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- PANL's very impressive revenue growth greatly exceeded the industry average of 3.6%. 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.
- UNIVERSAL DISPLAY CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, UNIVERSAL DISPLAY CORP continued to lose money by earning -$0.09 versus -$0.53 in the prior year. This year, the market expects an improvement in earnings ($0.64 versus -$0.09).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electronic Equipment, Instruments & Components industry. The net income increased by 230.9% when compared to the same quarter one year prior, rising from $3.31 million to $10.96 million.
- 44.80% is the gross profit margin for UNIVERSAL DISPLAY CORP which we consider to be strong. It has increased significantly from the same period last year. Along with this, the net profit margin of 36.60% significantly outperformed against the industry average.
-- Written by a member of TheStreet Ratings Staff