Display-technology researcher Universal Display (NASDAQ:OLED) reported first-quarter results on the evening of Thursday, May 7. The specialist in organic light-emitting diode (OLED) technologies posted analyst-stumping results across the board, but management canceled the company's full-year guidance targets due to COVID-19 uncertainty

Universal Display's first-quarter results by the numbers

Metric

Q1 2020

Q1 2019

Change

Analyst Consensus

Revenue

$112 million

$88 million

28%

$99 million

GAAP net income

$38 million

$31 million

21%

N/A

GAAP earnings per diluted share

$0.80

$0.66

21%

$0.67

Data source: Universal Display. GAAP = generally accepted accounting principles.

The meaty sales in the first quarter tied right back to the upcoming coronavirus worries. Several OLED panel makers stocked up on Universal Display's materials while supplies were strong and shipping operations around the world remained both affordable and dependable. The infrastructure could worsen at any given moment, so major clients such as Samsung and LG Display did what they could to avoid future back-end issues in their OLED manufacturing operations.

Universal Display CEO Steve Abramson said in the earnings call:

While our global supply chain remains solid and we've had no issues shipping materials to our customers and our customers continue to manufacture OLED panels, there are concerns about constraints in the consumer electronics supply chain due to the pandemic. From a market standpoint, near term demand visibility is unclear due to the tremendous uncertainties surrounding the consumer environment and the macroeconomic environment. In light of all of this, we believe it is prudent to withdraw our 2020 guidance.

A woman is beinding a flexible OLED display in her hands without disturbing the full-color image on the transparent screen.

Image source: Universal Display.

Looking ahead

The long-term growth story is still intact, despite a significant COVID-19 speed bump in 2020.

Universal Display is expanding its network of research offices and OLED materials shipping centers around the world. OLED screens are no longer the exclusive domain of high-end smartphones as the technology expands further down the pricing spectrum. Samsung and Huawei already offer OLED screens in mid-range handsets priced as low as $200. More than 15 consumer-electronics brands now offer OLED TV sets, up from just Samsung, LG, and Sony three years ago.

Panel makers are building and/or expanding their OLED manufacturing facilities, setting the stage for mass-market economies of scale and lower panel-making costs. All of this is great news for Universal Display and its investors. And the next step into the global consumer mainstream will come when those improved panel-building factories start to churn out OLED lighting products, as well.

All things considered, Universal Display is one of the most exciting growth stocks on the market today, even if its near-term business trajectory is clouded by COVID-19 uncertainty. The stock is trading 34% below last September's all-time highs at the moment, and I think it's an excellent buy at this temporary bargain-bin discount.