What: Shares of Universal Display Corporation (NASDAQ:OLED) rose as much as 10.8% early Monday, almost completely recouping the OLED technologist's 11.5% post-earnings plunge on Friday.
So what: To be fair, Universal Display not only fell short of its own quarterly expectations on revenue and earnings, but also issued guidance for 2016 revenue to increase to a range of $208.7 million to $230.6 million, representing growth of 15% over 2015 at the midpoint, plus or minus 5%. Analysts, on average, were anticipating 2016 revenue of $246.3 million.
As I wrote on Friday, however, nothing in Universal Display's Q4 results or guidance technically changes the company's compelling leadership position as the display industry shifts its focus to OLEDs, starting with OLED manufacturers using 2016 as a transition year to build significant new production capacity. As Universal Display CFO Sid Rosenblatt stated, this will enable "the continued proliferation of OLEDs in the marketplace, [...] paving the foundation for the next wave of expansion in OLED mass production" in 2017.
Now what: To that end, it's no wonder long-term oriented investors would be willing to take advantage of Universal Display's pullback to open or add to their positions. As long as Universal Display's long-term story remains intact -- and for all intents and purposes based on last week's report, it has -- I think early investors still have the chance to participate in the lion's share of its financial rewards as that story plays out.