Dolby Laboratories: Structural Licensing Growth and Raised Outlook Support OUTPERFORM Rating

Patrick Sholl, an analyst from Barrington, reiterated the Buy rating on Dolby Laboratories. The associated price target remains the same with $90.00.

Patrick Sholl has given his Buy rating due to a combination of factors tied to Dolby’s recent performance, outlook, and strategic positioning. He highlights that Dolby delivered first-quarter earnings that exceeded expectations on both revenue and non-GAAP earnings, and management subsequently raised full-year guidance for both sales and EPS. Despite macroeconomic headwinds and ongoing weakness in device-related “foundational” revenues, the company still anticipates overall top-line growth, supported by disciplined cost control and stronger profitability.

Sholl also emphasizes the structural growth opportunity in Dolby Atmos, Dolby Vision, and its imaging patent portfolio, which are expected to grow at a mid-teens pace and already represent nearly half of the firm’s licensing revenues. New product iterations such as Dolby Vision 2, expanding integration with OEMs like TCL and Hisense, and growing auto and sports streaming adoption reinforce his confidence in durable, higher-margin licensing streams. Combined with a solid dividend yield and a target price that implies notable upside from current levels, these factors underpin his OUTPERFORM (Buy) rating on Dolby Laboratories.