Critical Review: Valens Semiconductor (NYSE:VLN) versus Universal Display (NASDAQ:OLED)

Universal Display (NASDAQ:OLED) and Valens Semiconductor (NYSE:VLN) are both technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, valuation, dividends, profitability, institutional ownership, earnings and analyst recommendations.

Analyst Ratings

This is a summary of recent recommendations and price targets for Universal Display and Valens Semiconductor, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Universal Display	2	3	3	0	2.12
Valens Semiconductor	1	0	1	0	2.00

Universal Display currently has a consensus price target of $114.00, suggesting a potential upside of 56.38%. Valens Semiconductor has a consensus price target of $4.00, suggesting a potential upside of 127.92%. Given Valens Semiconductor’s higher possible upside, analysts clearly believe Valens Semiconductor is more favorable than Universal Display.

Valuation and Earnings

This table compares Universal Display and Valens Semiconductor”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Universal Display	$650.61 million	5.15	$242.07 million	$4.13	17.65
Valens Semiconductor	$70.62 million	2.69	-$31.58 million	($0.32)	-5.48

Universal Display has higher revenue and earnings than Valens Semiconductor. Valens Semiconductor is trading at a lower price-to-earnings ratio than Universal Display, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Universal Display has a beta of 1.53, suggesting that its stock price is 53% more volatile than the S&P 500. Comparatively, Valens Semiconductor has a beta of 1.3, suggesting that its stock price is 30% more volatile than the S&P 500.

Profitability

This table compares Universal Display and Valens Semiconductor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Universal Display	32.24%	11.35%	10.17%
Valens Semiconductor	-45.23%	-30.58%	-23.97%

Insider & Institutional Ownership

78.2% of Universal Display shares are held by institutional investors. Comparatively, 33.9% of Valens Semiconductor shares are held by institutional investors. 2.2% of Universal Display shares are held by company insiders. Comparatively, 58.9% of Valens Semiconductor shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Universal Display beats Valens Semiconductor on 12 of the 14 factors compared between the two stocks.

About Universal Display

Universal Display Corporation engages in the research, development, and commercialization of organic light emitting diode (OLED) technologies and materials for use in display and solid-state lighting applications in the United States and internationally. The company offers PHOLED technologies and materials for displays and lighting products under the UniversalPHOLED brand. 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; and OVJP, an organic vapor jet printing technology. In addition, the company provides technology development and support services, including third-party collaboration and support to third parties for the commercialization of their OLED products; and contract research services in the areas of chemical synthesis research, development, and commercialization for non-OLED applications, as well as engages in the intellectual property and technology licensing activities. Universal Display Corporation was founded in 1985 and is headquartered in Ewing, New Jersey.

About Valens Semiconductor

Valens Semiconductor Ltd. engages in the provision of semiconductor products for the audio-video and automotive industries. The company offers HDBaseT technology, which enables the simultaneous delivery of ultra-high-definition digital video and audio, Ethernet, USB, control signals, and power through a single long-reach cable. It also provides audio-video solutions for the enterprise, education, industrial, digital signage, industrial, and medical markets. In addition, it offers automotive chipsets that support advanced driver-assistance systems, automotive data solutions, infotainment, telematics, and backbone connectivity. The company’s product series include VS100, VS2000, VS3000, VS6000, VS7000, Valens USB and power extender, Valens VS6320, USB 3.2 Gen1 extension chipset, VA6000, and VA7000. It has a collaboration with iCatch Technology to develop a 360-degree multi-camera videoconferencing solution. The company operates in Israel, China, Hong Kong, the United States, Japan, Germany, Hungary, and internationally. Valens Semiconductor Ltd. is headquartered in Hod Hasharon, Israel.