Universal Display Corporation CAPEX decreased on 6.9% while Revenue increased on 5.8%
02/18/2021 • About Universal Display Corporation (
$OLED) • By InTwits
Universal Display Corporation reported 2020 financial results today. Here are the key drivers of the company's long term financial model:
- Universal Display Corporation is a growth stock: 2020 revenue growth was 5.8%, 5 year revenue CAGR was 17.6% at 2020 ROIC 18.1%
- Universal Display Corporation has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.4%. At the same time it's in pair with industry average of 7.3%
- CAPEX is quite volatile: $28m in 2020, $30m in 2019, $25m in 2018, $30m in 2017, $7m in 2016
- The company has highly profitable business model: ROIC is 18.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue increased on 5.8%. Revenue growth showed acceleration in 20Q4 - it increased 39.1% YoY. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 8.9 pp from -0.50% to 8.4% in 2020.
Gross Margin increased slightly on 1.6 pp from 78.5% to 80.1% in 2020. During the last 5 years Gross Margin bottomed in 2018 at 75.5% and was growing since that time. SG&A as a % of Revenue showed almost no change in 2020.
Net Income margin decreased on 3.0 pp from 34.1% to 31.1% in 2020.
Investments (CAPEX, working capital and M&A)
In 2020 Universal Display Corporation had CAPEX/Revenue of 6.5%. The company's CAPEX/Revenue decreased on 2.4 pp from 8.9% in 2017 to 6.5% in 2020. It's average CAPEX/Revenue for the last three years was 8.1%. During 2016-2020 CAPEX as a % of Revenue topped in 2018 at 10.3% and was declining since that time.
Return on investment
The company operates at good ROIC (18.1%) and ROE (15.5%). ROIC decreased on 2.9 pp from 21.0% to 18.1% in 2020. ROE decreased on 3.0 pp from 18.5% to 15.5% in 2020.
Leverage (Debt)
Debt level is -3.2x Net Debt / EBITDA and 0.0x Debt / EBITDA. Debt increased on 2.9% while cash jumped on 379%.
Universal Display Corporation has no short term refinancing risk: cash is higher than short term debt (33,672.5%).
Valuation and dividends
The company's trades at EV/EBITDA 46.5x and P/E 73.3x.
Management team
The company's CEO is Steven V Abramson. Steven V Abramson has 24 years tenure with the company. Universal Display Corporation's CFO Sidney D Rosenblatt has spent 25 years with the company.
Financial and operational results
FY ended 12/31/2020
Universal Display Corporation ($OLED) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 198.9 | 335.6 | 247.4 | 405.2 | 428.9 | 5.8% |
| Gross Profit | 166.8 | 271.2 | 186.9 | 318.0 | 343.4 | 8.0% |
| SG&A | 32.9 | 46.8 | 47.0 | 59.6 | 61.3 | 2.9% |
| EBITDA | 89.2 | 173.1 | 87.3 | 194.6 | 196.8 | 1.1% |
| EBIT | 68.4 | 146.2 | 56.7 | | | |
| Tax | 20.5 | 45.7 | 5.5 | | | |
| Net Income | 48.1 | 103.9 | 58.8 | 138.3 | 133.4 | -3.6% |
| Stock Based Compensation | 13.1 | 14.9 | 16.8 | | | |
Balance Sheet
|
|---|
| Cash | 139.4 | 132.8 | 211.0 | 131.6 | 630.0 | 378.6% |
| Accounts Receivable | 25.0 | 52.4 | 43.1 | | | |
| Inventory | 17.3 | 36.3 | 70.0 | | | |
| Accounts Payable | 8.1 | 13.8 | 10.5 | | | |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 1.6 | 1.9 | 16.9% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 6.9 | 6.9 | -0.3% |
Cash flow
|
|---|
| Capex | 7.3 | 29.8 | 25.4 | 30.1 | 28.0 | -6.9% |
| Dividends | | 6.0 | 11.0 | | | |
Ratios
|
|---|
| Revenue growth | 4.1% | 68.8% | -26.3% | 63.8% | 5.8% | |
| EBITDA growth | 92.3% | 94.2% | -49.6% | 122.9% | 1.1% | |
|
|---|
| Gross Margin | 83.9% | 80.8% | 75.5% | 78.5% | 80.1% | 1.6% |
| EBITDA Margin | 44.8% | 51.6% | 35.3% | 48.0% | 45.9% | -2.1% |
| EBIT Margin | 34.4% | 43.6% | 22.9% | | |
| SG&A, % of revenue | 16.5% | 13.9% | 19.0% | 14.7% | 14.3% | -0.4% |
| SBC, % of revenue | 6.6% | 4.4% | 6.8% | | |
| Net Income Margin | 24.2% | 31.0% | 23.8% | 34.1% | 31.1% | -3.0% |
| CAPEX, % of revenue | 3.7% | 8.9% | 10.3% | 7.4% | 6.5% | -0.9% |
|
|---|
| ROIC | 13.7% | 24.6% | 8.4% | 21.0% | 18.1% | -2.9% |
| ROE | 9.7% | 17.5% | 8.7% | 18.5% | 15.5% | -3.0% |
| Net Debt/EBITDA | -1.6x | -0.8x | -2.4x | -0.6x | -3.2x | -2.5x |
People
|
|---|
| Insider ownership | 3.0% | 3.0% | 3.0% | | | |
| Employees | 202 | 224 | 265 | | | |
| Revenue/Employee, th. $ | 985 | 1,498 | 934 | | | |
Universal Display Corporation ($OLED) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 112 | 58 | 117 | 142 | | 27.9% | -50.9% | 20.1% | 39.1% |
| EBITDA | 54 | 9 | 58 | 76 | | 25.8% | -85.2% | 16.8% | 72.3% |
| Net Income | 38 | 1 | 41 | 54 | | 21.2% | -98.1% | 9.6% | 104.0% |
Balance Sheet
|
|---|
| Cash | 223 | 134 | 163 | 630 | | -1.0% | -58.8% | -31.0% | 378.6% |
| Short Term Debt | 1 | 1 | 1 | 2 | | 7.7% | -7.7% | -35.3% | 16.9% |
| Long Term Debt | 7 | 6 | 6 | 7 | | -1.5% | 0.0% | -14.1% | -0.3% |
Ratios
|
|---|
| Gross Margin | 77.1% | 78.2% | 77.2% | 80.9% | | -2.0% | 1.5% | -2.1% | 0.5% |
| EBITDA Margin | 48.2% | 14.7% | 49.8% | 53.6% | | -0.8% | -34.1% | -1.4% | 10.3% |
| Net Income Margin | 34.0% | 1.4% | 34.6% | 38.1% | | -1.9% | -35.4% | -3.3% | 12.1% |
Peers in Semiconductors
Below you can find Universal Display Corporation benchmarking vs. other companies in Semiconductors industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Inphi Corporation ($IPHI) | - | 30.8% | -15.4% | 24.2% | 86.8% |
| Sequans Communications S.A. ($SQNS) | - | 5.9% | -16.6% | -23.3% | 65.0% |
| MaxLinear, Inc ($MXL) | - | 8.4% | -8.4% | -17.6% | 50.9% |
| Advanced Micro Devices, Inc. ($AMD) | - | 21.6% | 23.3% | 4.0% | 45.0% |
| Kopin Corporation ($KOPN) | - | 23.0% | -12.1% | 20.7% | 35.9% |
| |
|---|
| Median (43 companies) | 1.2% | 10.9% | 4.9% | -3.2% | 1.0% |
|---|
| Universal Display Corporation ($OLED) | - | 68.8% | -26.3% | 63.8% | 5.8% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| CEVA, Inc. ($CEVA) | 91.6% | 92.1% | 89.8% | 88.4% | 89.3% |
| Rambus, Inc. ($RMBS) | 80.1% | 79.9% | 76.8% | 77.1% | 75.0% |
| Analog Devices, Inc. ($ADI) | 65.1% | 59.9% | 68.3% | 67.0% | 65.9% |
| MoSys, Inc. ($MOSY) | 49.0% | 46.9% | 61.8% | 61.0% | 65.7% |
| Texas Instruments Incorporated ($TXN) | 61.8% | 64.3% | 65.1% | 63.7% | 64.1% |
| |
|---|
| Median (43 companies) | 47.2% | 48.6% | 50.2% | 50.4% | 49.2% |
|---|
| Universal Display Corporation ($OLED) | 83.9% | 80.8% | 75.5% | 78.5% | 80.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Texas Instruments Incorporated ($TXN) | 43.5% | 46.7% | 48.6% | 47.5% | 47.6% |
| Intel Corp ($INTC) | 35.2% | 41.7% | 45.7% | 45.9% | 46.7% |
| Broadcom Inc. ($AVGO) | 19.9% | 40.4% | 44.2% | 40.9% | 46.2% |
| Analog Devices, Inc. ($ADI) | 36.2% | 32.1% | 43.2% | 42.1% | 42.0% |
| Micron Technology, Inc. ($MU) | 25.4% | 47.9% | 65.0% | 54.7% | 40.4% |
| |
|---|
| Median (41 companies) | 9.2% | 10.7% | 9.3% | 12.9% | 17.3% |
|---|
| Universal Display Corporation ($OLED) | 44.8% | 51.6% | 35.3% | 48.0% | 45.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Micron Technology, Inc. ($MU) | 46.9% | 23.3% | 29.2% | 41.8% | 38.4% |
| Sequans Communications S.A. ($SQNS) | 11.8% | 13.3% | 22.9% | 29.6% | 27.1% |
| Intel Corp ($INTC) | 16.2% | 18.8% | 21.4% | 22.5% | 18.6% |
| First Solar, Inc. ($FSLR) | 7.9% | 17.5% | 33.0% | 21.8% | 15.4% |
| Power Integrations, Inc. ($POWI) | 3.1% | 7.5% | 5.9% | 5.7% | 14.5% |
| |
|---|
| Median (40 companies) | 3.6% | 4.7% | 4.2% | 3.7% | 3.6% |
|---|
| Universal Display Corporation ($OLED) | 3.7% | 8.9% | 10.3% | 7.4% | 6.5% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Texas Instruments Incorporated ($TXN) | 34.9% | 43.1% | 47.5% | 39.7% | 38.2% |
| Applied Materials Inc ($AMAT) | 19.0% | 31.2% | 36.4% | 27.7% | 32.1% |
| Advanced Micro Devices, Inc. ($AMD) | -21.7% | 7.3% | 21.6% | 21.5% | 31.8% |
| QUALCOMM Incorporated ($QCOM) | 15.8% | 5.7% | 2.2% | 38.0% | 28.1% |
| NVIDIA Corporation ($NVDA) | 13.1% | 27.3% | 35.3% | 36.9% | 22.7% |
| |
|---|
| Median (45 companies) | 1.4% | 3.2% | 2.2% | 2.2% | 5.3% |
|---|
| Universal Display Corporation ($OLED) | 13.7% | 24.6% | 8.4% | 21.0% | 18.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| SunPower Corporation ($SPWR) | - | - | - | - | 8.2x |
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 3.0x | 7.2x | 98.6x | - | 6.6x |
| Rambus, Inc. ($RMBS) | -0.1x | -0.1x | - | - | 5.9x |
| Inphi Corporation ($IPHI) | 4.5x | 33.7x | 32.2x | 4.5x | 3.4x |
| Canadian Solar Inc. ($CSIQ) | 11.3x | 6.8x | 2.7x | 3.4x | 3.3x |
| |
|---|
| Median (31 companies) | 0.4x | 0.4x | 0.3x | 0.5x | 0.5x |
|---|
| Universal Display Corporation ($OLED) | -1.6x | -0.8x | -2.4x | -0.6x | -3.2x |
