Universal Display Corp. OLED shares rallied 17.4% in the last trading session to close at $125.17. 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 28.8% loss over the past four weeks.

Universal Display boasts a comprehensive patent portfolio, which is helping the company acquire a number of large customers, generating significant licensing revenues. 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 expanding automotive industry offers opportunities. Major automakers such as Audi, Lotus and Zeekr have already introduced car models with OLED screens.

The company derived the lion’s share of its revenues from outside the United States, with operations in South Korea, Ireland, China, Japan and several other countries. Such global presence makes it vulnerable to geopolitical volatility. The U.S. Government's decision to impose tariffs could have triggered a trade war, significantly impacting Universal Display’s business. However, the recent decision to pause higher tariffs for 90 days for most countries except China is a positive development for the company. These factors have instilled investor optimism, which probably propelled the share price appreciation.

This organic light-emitting diode technology company is expected to post quarterly earnings of $1.03 per share in its upcoming report, which represents a year-over-year change of -13.5%. Revenues are expected to be $154.85 million, down 6.3% 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 been revised 1.3% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. 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 part of the Zacks Electronics - Miscellaneous Components industry. Littelfuse LFUS, another stock in the same industry, closed the last trading session 11.3% higher at $166.62. LFUS has returned -28.5% in the past month.

Littelfuse's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $1.82. Compared to the company's year-ago EPS, this represents a change of +3.4%. Littelfuse currently boasts a Zacks Rank of #3 (Hold).

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This article originally published on Zacks Investment Research (zacks.com).

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