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Universal Display (OLED) Moves 3% Higher: Will This Strength Last?

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Universal Display Corp. OLED shares rallied 3% in the last trading session to close at $107.36. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 14.6% loss over the past four weeks.

Universal Display is witnessing solid demand for organic light-emitting diode ("OLED") products. Recovery in OLED-based panel adoption across the automotive market and rebound in the smartphone domain are positives. OLED is suitable for commercial usage in a number of industries, including smartphones, television, virtual reality devices and automotive markets.

The increasing proliferation of smartphones, wearables and tablets are driving adoption of small-area OLEDs. Large-area OLED displays are increasingly used in televisions. The company’s strong patent portfolio helps drive royalty and license fees revenues. Synergies from the acquisition of Adesis are also bolstering top-line growth.

This organic light-emitting diode technology company is expected to post quarterly earnings of $1 per share in its upcoming report, which represents a year-over-year change of +17.7%. Revenues are expected to be $151.65 million, up 17% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Universal Display, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on OLED going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Universal Display is a member of the Zacks Electronics - Miscellaneous Components industry. One other stock in the same industry, Yaskawa Electric Corp. YASKY, finished the last trading session 0.6% higher at $63.82. YASKY has returned -5.5% over the past month.

Yaskawa Electric Corp.'s consensus EPS estimate for the upcoming report has changed -12.4% over the past month to $0.55. Compared to the company's year-ago EPS, this represents a change of -22.5%. Yaskawa Electric Corp. currently boasts a Zacks Rank of #3 (Hold).

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