Why Universal Display Shares Are Going Dim

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of LED supplier Universal Display (Nasdaq: PANL  ) plummeted 18% today after its quarterly results and guidance missed Wall Street expectations.

So what: The company's third-quarter miss was so wide -- EPS loss of $0.12 on revenue of $12.5 million versus Wall Street's estimate of a $0.02 profit and a top-line of $18.6 million -- that analysts have no choice but to lower their valuation estimates yet again. Management cited weaker materials sales and license fees for the miss, reinforcing serious concerns over a prolonged slowdown in the industry.

Now what: Management now sees full-year revenue of $80 million-$82 million, down from its prior view of $90 million-$110 million and well below the consensus of $100 million. "We have never taken a short-term focus," CEO Steve Abramson reassured analysts in a conference call. "We believe more strongly than ever that despite this near-term slowdown a road to greater OLED adoption continues to stretch far and wide before us." With the stock now down more than 50% over the past year and trading at a forward P/E of 14, now might even be a good time to buy into those still-attractive long-term trends.

Interested in more info on Universal Display? Add it to your watchlist.

Read/Post Comments (1) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 08, 2012, at 5:37 PM, sidneyleejohnson wrote:

    "Management cited weaker materials sales and license fees for the miss, reinforcing serious concerns over a prolonged slowdown in the industry."

    That conclusion is shameful.

    Just take a look at some of the analyst deep dives in Korea for the oled industry like this one:

    and appreciate that SMD is ramping up to increase oled capacity 5 fold over the next 2 years via lines V1, V2, A2E, and A2 phase 3. What is at stake is exactly when they kick into production and when they hit 100% capacity. SMD is running its existing lines at 100% capacity. this is not even remotely supportive of a serious concern about a prolonged slowdown in the industry. The industry is on fire and straining to add more capacity. Not just within SMD but many more oem's want in as well. AUO and LG are gearing up to produce oled displays as well as others. lighting is also in the pipeline. While you may have back tracked a bit with "Now what" ... I think the conclusion in "So What" was WAY out of line with the current status of the oled technology diffusion curve.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2102904, ~/Articles/ArticleHandler.aspx, 10/25/2016 5:23:32 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,169.27 -53.76 -0.30%
S&P 500 2,143.16 -8.17 -0.38%
NASD 5,283.40 -26.43 -0.50%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/25/2016 4:00 PM
OLED $49.70 Down -1.02 -2.01%
Universal Display CAPS Rating: ****