Is Universal Display Corp. overvalued or undervalued?

As of 31 July 2025, the valuation grade for Universal Display Corp. moved from fair to very attractive, indicating a positive shift in its valuation outlook. The company appears to be undervalued, supported by a P/E ratio of 31, which is lower than the peer average P/E of 28.20 for its comparable companies. Additionally, the EV to EBITDA ratio stands at 22.83, while peers like Littelfuse, Inc. and Advanced Energy Industries, Inc. show significantly higher ratios of 15.40 and 28.01, respectively. The PEG ratio of 3.88 also suggests that the stock may be undervalued relative to its growth potential.
In terms of recent performance, Universal Display Corp. has underperformed the S&P 500 over the past year with a return of -31.40% compared to the index's 17.14%. However, it has shown resilience over a three-year period with a return of 37.88%, although this still lags behind the S&P 500's 70.41% return. Overall, the combination of attractive valuation ratios and the recent grade change supports the conclusion that Universal Display Corp. is currently undervalued.