Intrinsic value of Universal Display - OLED

Previous Close

$108.60

  Intrinsic Value

$2.81

stock screener

  Rating & Target

str. sell

-97%

  Value-price divergence*

-140%

Previous close

$108.60

 
Intrinsic value

$2.81

 
Up/down potential

-97%

 
Rating

str. sell

 
Value-price divergence*

-140%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of OLED stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 5.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  4.19
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  199
  318
  492
  736
  1,067
  1,506
  2,070
  2,779
  3,649
  4,696
  5,931
  7,365
  9,004
  10,853
  12,913
  15,183
  17,662
  20,345
  23,228
  26,307
  29,577
  33,034
  36,673
  40,493
  44,492
  48,668
  53,023
  57,559
  62,278
  67,184
  72,284
Variable operating expenses, $m
 
  265
  408
  609
  883
  1,245
  1,712
  2,297
  3,016
  3,880
  4,900
  6,083
  7,437
  8,964
  10,665
  12,541
  14,588
  16,804
  19,186
  21,729
  24,429
  27,284
  30,291
  33,446
  36,748
  40,198
  43,795
  47,541
  51,439
  55,491
  59,703
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  130
  265
  408
  609
  883
  1,245
  1,712
  2,297
  3,016
  3,880
  4,900
  6,083
  7,437
  8,964
  10,665
  12,541
  14,588
  16,804
  19,186
  21,729
  24,429
  27,284
  30,291
  33,446
  36,748
  40,198
  43,795
  47,541
  51,439
  55,491
  59,703
Operating income, $m
  68
  54
  84
  126
  184
  261
  359
  482
  633
  816
  1,031
  1,282
  1,567
  1,889
  2,247
  2,642
  3,074
  3,541
  4,043
  4,578
  5,148
  5,749
  6,383
  7,047
  7,743
  8,470
  9,228
  10,018
  10,839
  11,693
  12,580
EBITDA, $m
  88
  79
  121
  181
  263
  371
  511
  685
  900
  1,158
  1,463
  1,816
  2,221
  2,677
  3,185
  3,745
  4,356
  5,018
  5,729
  6,488
  7,295
  8,147
  9,045
  9,987
  10,973
  12,004
  13,078
  14,196
  15,360
  16,570
  17,828
Interest expense (income), $m
  0
  0
  2
  5
  9
  15
  23
  33
  45
  61
  79
  101
  126
  155
  187
  223
  263
  307
  354
  405
  459
  516
  577
  641
  708
  779
  852
  929
  1,008
  1,091
  1,178
Earnings before tax, $m
  69
  54
  82
  121
  175
  245
  336
  449
  588
  755
  952
  1,181
  1,441
  1,734
  2,060
  2,419
  2,810
  3,234
  3,688
  4,174
  4,689
  5,233
  5,805
  6,406
  7,035
  7,692
  8,376
  9,089
  9,830
  10,601
  11,403
Tax expense, $m
  21
  15
  22
  33
  47
  66
  91
  121
  159
  204
  257
  319
  389
  468
  556
  653
  759
  873
  996
  1,127
  1,266
  1,413
  1,567
  1,730
  1,899
  2,077
  2,262
  2,454
  2,654
  2,862
  3,079
Net income, $m
  48
  39
  60
  89
  128
  179
  245
  328
  429
  551
  695
  862
  1,052
  1,266
  1,504
  1,766
  2,052
  2,361
  2,693
  3,047
  3,423
  3,820
  4,238
  4,677
  5,136
  5,615
  6,115
  6,635
  7,176
  7,739
  8,324

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  328
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  628
  480
  742
  1,110
  1,610
  2,271
  3,123
  4,192
  5,504
  7,082
  8,945
  11,108
  13,581
  16,369
  19,476
  22,901
  26,639
  30,686
  35,035
  39,679
  44,611
  49,824
  55,314
  61,076
  67,107
  73,406
  79,975
  86,816
  93,933
  101,333
  109,025
Adjusted assets (=assets-cash), $m
  300
  480
  742
  1,110
  1,610
  2,271
  3,123
  4,192
  5,504
  7,082
  8,945
  11,108
  13,581
  16,369
  19,476
  22,901
  26,639
  30,686
  35,035
  39,679
  44,611
  49,824
  55,314
  61,076
  67,107
  73,406
  79,975
  86,816
  93,933
  101,333
  109,025
Revenue / Adjusted assets
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
Average production assets, $m
  145
  231
  357
  534
  775
  1,093
  1,503
  2,018
  2,649
  3,409
  4,306
  5,347
  6,537
  7,879
  9,375
  11,023
  12,822
  14,770
  16,864
  19,099
  21,473
  23,982
  26,625
  29,398
  32,301
  35,333
  38,495
  41,788
  45,213
  48,776
  52,478
Working capital, $m
  345
  27
  42
  63
  91
  128
  176
  236
  310
  399
  504
  626
  765
  922
  1,098
  1,291
  1,501
  1,729
  1,974
  2,236
  2,514
  2,808
  3,117
  3,442
  3,782
  4,137
  4,507
  4,892
  5,294
  5,711
  6,144
Total debt, $m
  0
  60
  147
  270
  436
  656
  940
  1,296
  1,733
  2,258
  2,879
  3,599
  4,422
  5,351
  6,386
  7,526
  8,771
  10,118
  11,567
  13,113
  14,755
  16,492
  18,320
  20,238
  22,247
  24,344
  26,532
  28,810
  31,180
  33,644
  36,205
Total liabilities, $m
  99
  160
  247
  370
  536
  756
  1,040
  1,396
  1,833
  2,358
  2,979
  3,699
  4,522
  5,451
  6,486
  7,626
  8,871
  10,218
  11,667
  13,213
  14,855
  16,592
  18,420
  20,338
  22,347
  24,444
  26,632
  28,910
  31,280
  33,744
  36,305
Total equity, $m
  528
  320
  495
  740
  1,074
  1,515
  2,083
  2,796
  3,671
  4,724
  5,967
  7,409
  9,058
  10,918
  12,991
  15,275
  17,768
  20,468
  23,368
  26,466
  29,755
  33,233
  36,894
  40,738
  44,760
  48,962
  53,343
  57,906
  62,653
  67,589
  72,720
Total liabilities and equity, $m
  627
  480
  742
  1,110
  1,610
  2,271
  3,123
  4,192
  5,504
  7,082
  8,946
  11,108
  13,580
  16,369
  19,477
  22,901
  26,639
  30,686
  35,035
  39,679
  44,610
  49,825
  55,314
  61,076
  67,107
  73,406
  79,975
  86,816
  93,933
  101,333
  109,025
Debt-to-equity ratio
  0.000
  0.190
  0.300
  0.360
  0.410
  0.430
  0.450
  0.460
  0.470
  0.480
  0.480
  0.490
  0.490
  0.490
  0.490
  0.490
  0.490
  0.490
  0.490
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
Adjusted equity ratio
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  48
  39
  60
  89
  128
  179
  245
  328
  429
  551
  695
  862
  1,052
  1,266
  1,504
  1,766
  2,052
  2,361
  2,693
  3,047
  3,423
  3,820
  4,238
  4,677
  5,136
  5,615
  6,115
  6,635
  7,176
  7,739
  8,324
Depreciation, amort., depletion, $m
  20
  25
  37
  55
  79
  111
  152
  203
  267
  342
  432
  535
  654
  788
  937
  1,102
  1,282
  1,477
  1,686
  1,910
  2,147
  2,398
  2,662
  2,940
  3,230
  3,533
  3,849
  4,179
  4,521
  4,878
  5,248
Funds from operations, $m
  81
  64
  97
  144
  207
  290
  397
  531
  696
  894
  1,127
  1,397
  1,706
  2,054
  2,441
  2,868
  3,334
  3,838
  4,379
  4,957
  5,570
  6,218
  6,900
  7,616
  8,366
  9,148
  9,964
  10,814
  11,698
  12,617
  13,572
Change in working capital, $m
  1
  10
  15
  21
  28
  37
  48
  60
  74
  89
  105
  122
  139
  157
  175
  193
  211
  228
  245
  262
  278
  294
  309
  325
  340
  355
  370
  386
  401
  417
  433
Cash from operations, $m
  80
  54
  82
  123
  178
  253
  349
  471
  622
  805
  1,022
  1,275
  1,566
  1,897
  2,266
  2,675
  3,123
  3,610
  4,134
  4,695
  5,292
  5,924
  6,591
  7,292
  8,026
  8,793
  9,594
  10,428
  11,296
  12,200
  13,138
Maintenance CAPEX, $m
  0
  -14
  -23
  -36
  -53
  -77
  -109
  -150
  -202
  -265
  -341
  -431
  -535
  -654
  -788
  -937
  -1,102
  -1,282
  -1,477
  -1,686
  -1,910
  -2,147
  -2,398
  -2,662
  -2,940
  -3,230
  -3,533
  -3,849
  -4,179
  -4,521
  -4,878
New CAPEX, $m
  -103
  -87
  -126
  -177
  -241
  -318
  -410
  -515
  -632
  -760
  -897
  -1,041
  -1,190
  -1,342
  -1,495
  -1,648
  -1,799
  -1,948
  -2,093
  -2,235
  -2,374
  -2,509
  -2,642
  -2,773
  -2,903
  -3,032
  -3,162
  -3,293
  -3,426
  -3,562
  -3,702
Cash from investing activities, $m
  -38
  -101
  -149
  -213
  -294
  -395
  -519
  -665
  -834
  -1,025
  -1,238
  -1,472
  -1,725
  -1,996
  -2,283
  -2,585
  -2,901
  -3,230
  -3,570
  -3,921
  -4,284
  -4,656
  -5,040
  -5,435
  -5,843
  -6,262
  -6,695
  -7,142
  -7,605
  -8,083
  -8,580
Free cash flow, $m
  42
  -47
  -67
  -90
  -116
  -143
  -170
  -194
  -211
  -220
  -216
  -197
  -158
  -99
  -17
  89
  221
  380
  564
  773
  1,008
  1,268
  1,550
  1,856
  2,183
  2,531
  2,899
  3,286
  3,692
  4,116
  4,558
Issuance/(repayment) of debt, $m
  0
  60
  87
  122
  167
  220
  283
  356
  437
  526
  620
  720
  823
  929
  1,035
  1,140
  1,245
  1,348
  1,448
  1,546
  1,642
  1,736
  1,828
  1,919
  2,008
  2,098
  2,187
  2,278
  2,370
  2,464
  2,561
Issuance/(repurchase) of shares, $m
  1
  81
  115
  157
  206
  262
  323
  385
  446
  502
  548
  580
  597
  594
  568
  518
  442
  339
  208
  51
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  0
  141
  202
  279
  373
  482
  606
  741
  883
  1,028
  1,168
  1,300
  1,420
  1,523
  1,603
  1,658
  1,687
  1,687
  1,656
  1,597
  1,642
  1,736
  1,828
  1,919
  2,008
  2,098
  2,187
  2,278
  2,370
  2,464
  2,561
Total cash flow (excl. dividends), $m
  42
  94
  135
  189
  257
  339
  436
  547
  671
  807
  953
  1,104
  1,262
  1,423
  1,586
  1,748
  1,908
  2,066
  2,220
  2,370
  2,651
  3,004
  3,378
  3,775
  4,191
  4,629
  5,086
  5,564
  6,062
  6,580
  7,120
Retained Cash Flow (-), $m
  -61
  -120
  -175
  -245
  -334
  -441
  -568
  -713
  -875
  -1,053
  -1,243
  -1,443
  -1,649
  -1,860
  -2,072
  -2,284
  -2,493
  -2,699
  -2,901
  -3,098
  -3,290
  -3,477
  -3,662
  -3,843
  -4,023
  -4,202
  -4,381
  -4,563
  -4,747
  -4,936
  -5,130
Prev. year cash balance distribution, $m
 
  328
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  301
  -39
  -56
  -77
  -102
  -132
  -166
  -204
  -245
  -290
  -339
  -387
  -437
  -486
  -536
  -585
  -634
  -681
  -727
  -639
  -474
  -283
  -68
  169
  427
  705
  1,001
  1,315
  1,644
  1,989
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  289
  -36
  -49
  -63
  -79
  -96
  -112
  -127
  -141
  -152
  -161
  -165
  -166
  -163
  -157
  -149
  -138
  -125
  -112
  -81
  -49
  -23
  -4
  9
  17
  21
  21
  20
  18
  15
Current shareholders' claim on cash, %
  100
  95.9
  92.3
  89.3
  86.7
  84.5
  82.7
  81.1
  79.7
  78.6
  77.6
  76.8
  76.2
  75.6
  75.2
  74.9
  74.7
  74.5
  74.4
  74.4
  74.4
  74.4
  74.4
  74.4
  74.4
  74.4
  74.4
  74.4
  74.4
  74.4
  74.4

Universal Display Corporation engages in the research, development, and commercialization of organic light emitting diode (OLED) technologies and materials for use in flat panel displays and solid-state lighting applications. It owns, exclusively licenses, or has the sole right to sublicense approximately 4,200 patents issued and pending worldwide. The company licenses and supplies its proprietary UniversalPHOLED materials to display manufacturers and others. It is also involved in the research, development, and commercialization of other OLED device and manufacturing technologies, including FOLED that are flexible OLEDs for the fabrication of OLEDs on flexible substrates; encapsulation technology for the packaging of flexible OLEDs and other thin-film devices, as well as for use as a barrier film for plastic substrates; UniversalP2OLED, which are printable phosphorescent OLEDs; OVJP, an organic vapor jet printing technology; OVPD, an organic vapor phase deposition for manufacturing a small molecule OLED; and TOLED, which are transparent OLEDs for the fabrication of OLEDs that have transparent cathodes. In addition, the company provides technology development and support services, including government contract work and support provided to third parties for the commercialization of their OLED products. It has strategic relationships with Samsung Display Co., Ltd.; LG Display Co., Ltd.; AU Optronics Corporation; BOE Technology Group Co., Ltd.; Innolux Corporation; Kaneka Corporation; Konica Minolta Holdings Inc.; Lumiotec, Inc.; LG Chem, Ltd.; NEC Lighting, Ltd.; Osram GmbH; Pioneer Corporation; Sony; Sumitomo Chemical Co., Ltd.; and Tianma Micro-electronics Co., Ltd. The company was founded in 1985 and is headquartered in Ewing, New Jersey.

FINANCIAL RATIOS  of  Universal Display (OLED)

Valuation Ratios
P/E Ratio 106.1
Price to Sales 25.6
Price to Book 9.6
Price to Tangible Book
Price to Cash Flow 63.7
Price to Free Cash Flow -221.5
Growth Rates
Sales Growth Rate 4.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 1960%
Cap. Spend. - 3 Yr. Gr. Rate 83.1%
Financial Strength
Quick Ratio NaN
Current Ratio 0.4
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 8.1%
Ret/ On Assets - 3 Yr. Avg. 6.6%
Return On Total Capital 9.6%
Ret/ On T. Cap. - 3 Yr. Avg. 7.5%
Return On Equity 9.6%
Return On Equity - 3 Yr. Avg. 7.5%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 86.9%
Gross Margin - 3 Yr. Avg. 77.5%
EBITDA Margin 44.7%
EBITDA Margin - 3 Yr. Avg. 35.7%
Operating Margin 34.7%
Oper. Margin - 3 Yr. Avg. 27.4%
Pre-Tax Margin 34.7%
Pre-Tax Margin - 3 Yr. Avg. 27.6%
Net Profit Margin 24.1%
Net Profit Margin - 3 Yr. Avg. 18%
Effective Tax Rate 30.4%
Eff/ Tax Rate - 3 Yr. Avg. 37.9%
Payout Ratio 0%

OLED stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the OLED stock intrinsic value calculation we used $199 million for the last fiscal year's total revenue generated by Universal Display. The default revenue input number comes from 2016 income statement of Universal Display. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our OLED stock valuation model: a) initial revenue growth rate of 60% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for OLED is calculated based on our internal credit rating of Universal Display, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Universal Display.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of OLED stock the variable cost ratio is equal to 83.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for OLED stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Universal Display.

Corporate tax rate of 27% is the nominal tax rate for Universal Display. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the OLED stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for OLED are equal to 72.6%.

Life of production assets of 10 years is the average useful life of capital assets used in Universal Display operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for OLED is equal to 8.5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $528 million for Universal Display - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 45.614 million for Universal Display is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Universal Display at the current share price and the inputted number of shares is $5.0 billion.

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COMPANY NEWS

▶ S&P 500 Futures: These 2 IBD 50 iPhone 8 Plays Are Near Buys   [Aug-08-17 07:04AM  Investor's Business Daily]
▶ Universal Display Reverses Higher On Earnings   [05:59AM  Investor's Business Daily]
▶ OLED Specialist Universal Display Crushes Wall Street's Estimates   [Aug-03-17 05:35PM  Investor's Business Daily]
▶ Universal Display posts 2Q profit   [05:22PM  Associated Press]
▶ Why Universal Display Inc. Shares Rose 10.4% in July   [Aug-01-17 08:25AM  Motley Fool]
▶ Now's the Time to Buy These Stocks   [Jul-26-17 08:11AM  Motley Fool]
▶ Apple Reportedly Developing Its Own OLED Technology   [Jul-24-17 07:45PM  Motley Fool]
▶ These 3 Stocks Have Quadrupled Since 2014   [Jul-23-17 11:32AM  Motley Fool]
▶ OLED Smartphone Growth Driving This Hot Stock   [Jul-14-17 06:11PM  Investor's Business Daily]
▶ Apple Looking To Use OLED Screens On All New iPhones Next Year   [Jul-06-17 04:36PM  Investor's Business Daily]
▶ Top-Performing Tech Stocks of 2017   [Jun-22-17 04:39PM  Motley Fool]
▶ Better Buy: Corning Incorporated vs. Universal Display   [Jun-21-17 07:58PM  Motley Fool]
▶ 3 Stocks with Universal Display-like Return Potential   [Jun-18-17 02:32PM  Motley Fool]
▶ 3 Promising Technology Stocks for Aggressive Investors   [Jun-17-17 08:21AM  Motley Fool]
▶ Time To Go Bargain Hunting In High Tech Stocks   [Jun-15-17 09:08PM  Forbes]
▶ Universal Display Corporation: Cramer's Top Takeaways   [Jun-13-17 12:23PM  TheStreet.com]
▶ 3 Stocks That Feel Like Microsoft in 1986   [Jun-06-17 12:33PM  Motley Fool]
▶ 3 Stocks That Feel Like Microsoft in 1986   [Jun-03-17 11:00AM  Motley Fool]
▶ Why Universal Display Stock Soared 26.9% in May   [Jun-02-17 12:00PM  Motley Fool]
▶ 3 Stocks With Embarrassingly Low Dividends   [May-31-17 09:35AM  Motley Fool]
▶ 3 Growth Stocks for Sharp Investors   [May-30-17 06:55PM  Motley Fool]
▶ These Stocks Have Doubled in 2017   [May-23-17 09:55AM  Motley Fool]
▶ 3 Top Phablet Stocks to Buy in 2017   [May-19-17 08:11AM  Motley Fool]
▶ 3 Growth Stocks for May   [07:23PM  Motley Fool]
▶ 3 Growth Stocks for Bold Investors   [08:52AM  Motley Fool]
▶ Apple, OLED Stock Play Coherent Beats, Sees 'Unprecedented Demand'   [May-09-17 04:50PM  Investor's Business Daily]
▶ Jim Cramer -- I Would Not Short Shares of Universal Display   [May-08-17 11:27AM  TheStreet.com]
▶ What Happened in the Stock Market Today   [May-05-17 04:54PM  Motley Fool]
▶ OLED Display Firm Rockets On Monster Q1 Sales, Earnings Beat   [04:23PM  Investor's Business Daily]
▶ Earnings Calendar, Analyst Estimates And Stocks To Watch   [12:32PM  Investor's Business Daily]
▶ Story Stocks from Briefing.com   [11:36AM  Briefing.com]
▶ Cramer's Stop Trading: OLED   [09:52AM  CNBC Videos]
▶ Stocks Open Mixed; Dow Lags Despite Strong Jobs Data   [09:48AM  Investor's Business Daily]
▶ Universal Display posts 1Q profit   [04:54PM  Associated Press]
▶ Starbucks Rival Nears Buy Zone Ahead Of Earnings: Investing Action Plan   [May-03-17 05:27PM  Investor's Business Daily]
▶ Apple, Tesla, Facebook, Fed Will Grab Spotlight: Investing Action Plan   [Apr-29-17 12:39PM  Investor's Business Daily]
▶ Corning Enters Buy Zone On Earnings; Gets IBD Rating Upgrade   [Apr-28-17 11:29AM  Investor's Business Daily]
Stock chart of OLED Financial statements of OLED
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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