Dolby Laboratories (DLB) AI Stock Analysis

• Market Cap: $6.19B
• Dividend Yield: 2.05%
• Average Volume (3M): 847.33K
• Price to Earnings (P/E): 26.1
• Beta (1Y): 0.80
• Revenue Growth: 5.92%
• EPS Growth: -2.98%
• Country: US
• Employees: 2,080
• Sector: Industrials
• Sector Strength: 72
• Industry: Information Technology Services
• EPS (TTM): 1.06
• Shares Outstanding: 60,884,770
• 10 Day Avg. Volume: 860,928
• 30 Day Avg. Volume: 847,331
• PEG Ratio: -9.32
• Price to Book (P/B): 2.65
• Price to Sales (P/S): 5.14
• P/FCF Ratio: 16.13
• Enterprise Value/Market Cap: 0.89
• Enterprise Value/Revenue: 4.13
• Enterprise Value/Gross Profit: 4.70
• Enterprise Value/Ebitda: 14.58
• 1Y Price Target: $90.00
• Price Target Upside: 40.67% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 4.35
• Revenue Forecast (FY): $1.41B

• Rating: 74 Outperform
• Price Target: $73.00 ▲(14.10% Upside)
• Action: Reiterated Date: 02/07/26
• Date: Action: Reiterated 02/07/26

The score is driven primarily by strong financial quality (high margins and very low leverage) and a constructive earnings update with raised FY guidance and visible momentum in strategic licensing areas. Offsetting this are mixed-to-weak technical signals (negative MACD and price below longer-term averages) and a valuation that looks fair-to-slightly expensive given recent TTM growth variability.

Positive Factors

Revenue Growth

The 6% revenue growth, supported by strategic acquisitions, indicates a strong market position and potential for sustained future growth.

Product Innovation

The launch of Dolby Vision 2 highlights Dolby's commitment to innovation, enhancing its competitive edge in the imaging technology market.

Automotive Market Expansion

Expanding into the automotive sector with major brands increases Dolby's market reach and diversifies its revenue streams.

Negative Factors

Foundational Audio Revenue Decline

Declining revenue in foundational audio technology could indicate challenges in maintaining market share in core segments.

Consumer Electronics Decline

A decline in consumer electronics and PCs suggests potential headwinds in these markets, impacting overall revenue growth.

Q1 Fiscal 2026 Revenue Guidance

Projected revenue decline in Q1 2026 indicates potential short-term challenges, affecting near-term financial performance.

Dolby Laboratories Business Overview & Revenue Model

Company Description

Dolby Laboratories, Inc. creates audio and imaging technologies that transform entertainment and communications at the cinema, DTV, transmissions and devices, mobile devices, OTT video and music services, and home entertainment devices. The company develops and licenses its audio technologies, such as AAC & HE-AAC, a digital audio codec solution used for a range of media applications.; AVC, a digital video codec with high bandwidth efficiency used in various media devices; Dolby AC-4, an digital audio coding technology that delivers new audio experiences to a range of playback devices; and Dolby Atmos technology for cinema and a range of media devices. Its audio technologies also include Dolby Digital, a digital audio coding technology that provides multichannel sound to applications; Dolby Digital Plus, a digital audio coding technology that offers audio transmission for a range of media applications and devices; Dolby TrueHD, a digital audio coding technology providing encoding for media application; Dolby Vision, an imaging technology for cinema and media devices; Dolby Voice, an audio conferencing technology; and HEVC, a digital video codec with high bandwidth efficiency to support for media devices. In addition, the company designs and manufactures digital cinema servers, cinema processors, amplifiers, loudspeakers, hardware components, video conferencing solutions, and other products for the cinema, television, broadcast, communication, and entertainment industries. Further, it offers various services to support theatrical and television production for cinema exhibition, broadcast, and home entertainment. The company serves film studios, content creators, post-production facilities, cinema operators, broadcasters, and video game designers. It sells its products directly to the end users, as well as through dealers and distributors worldwide. Dolby Laboratories, Inc. was founded in 1965 and is headquartered in San Francisco, California.

How the Company Makes Money

Dolby Laboratories generates revenue primarily through licensing its technologies to a wide range of partners in the entertainment and technology sectors. Key revenue streams include licensing fees from film studios, television networks, and streaming services that utilize Dolby's audio and video technologies in their productions. Additionally, Dolby earns income from partnerships with consumer electronics manufacturers who integrate Dolby technologies into their products, such as TVs, sound systems, and smartphones. The company also engages in the sale of products and services related to its technologies, including software tools and consulting services for content creators. Significant factors contributing to its earnings include the growing demand for high-quality audio and video experiences, the expansion of streaming services, and collaborations with key industry players, enhancing Dolby's market presence and revenue potential.

Dolby Laboratories Financial Statement Overview

Summary

Strong and resilient fundamentals: premium gross margins (~88%) and solid operating profitability, backed by an exceptionally conservative balance sheet (very low leverage). The main risk is uneven momentum, with reported TTM revenue and free-cash-flow growth deterioration creating near-term top-line and cash-flow visibility concerns.

Income Statement

DLB shows consistently strong profitability, with very high gross margins (~88% in both 2025 TTM (Trailing-Twelve-Months) and 2025 annual) and healthy operating profitability (2025 TTM EBIT margin ~21% and EBITDA margin ~29%). Net margins remain solid (~19% in 2025 TTM), though below the stronger 2021 level (~24%), indicating some compression versus peak profitability. Revenue performance is the main drawback: while 2025 annual revenue grew ~6% vs. 2024, 2025 TTM revenue growth is sharply negative (as reported), creating uncertainty around near-term top-line momentum.

Balance Sheet

The balance sheet is a clear strength. Leverage is extremely low (debt-to-equity ~0.015 in 2025 TTM (Trailing-Twelve-Months)/2025 annual), giving the company significant financial flexibility and low balance-sheet risk. Equity has trended higher versus 2022–2024, and returns on equity are steady near ~10% in 2025, supporting a picture of durable profitability without relying on debt. The main limitation is that returns are good but not exceptional relative to the company’s very large equity base.

Cash Flow

Cash generation is solid, with 2025 TTM (Trailing-Twelve-Months) operating cash flow (~$420M) and free cash flow (~$380M) both covering reported earnings well (free cash flow is ~91% of net income). However, growth has been uneven: 2025 annual free cash flow grew modestly (~0.4%), while 2025 TTM free cash flow growth is sharply negative (as reported), signaling potential volatility in cash conversion or timing. Overall cash flow quality is good, but the recent growth trajectory is a watch item.

Breakdown	TTM	Sep 2025	Sep 2024	Sep 2023	Sep 2022	Sep 2021
Income Statement
Total Revenue	1.34B	1.35B	1.27B	1.30B	1.25B	1.28B
Gross Profit	1.18B	1.19B	1.13B	1.15B	1.11B	1.15B
EBITDA	379.08M	378.56M	399.81M	345.57M	318.89M	450.37M
Net Income	240.52M	255.02M	261.82M	200.66M	184.09M	310.23M
Balance Sheet
Total Assets	3.19B	3.23B	3.13B	2.99B	2.70B	3.12B
Cash, Cash Equivalents and Short-Term Investments	644.58M	702.60M	577.75M	957.11M	817.58M	1.27B
Total Debt	40.64M	38.88M	46.99M	50.65M	50.94M	72.12M
Total Liabilities	589.25M	595.81M	643.72M	622.38M	451.15M	518.66M
Stockholders Equity	2.59B	2.62B	2.48B	2.36B	2.25B	2.60B
Cash Flow
Free Cash Flow	379.68M	430.26M	297.25M	336.74M	259.12M	393.30M
Operating Cash Flow	420.22M	472.20M	327.25M	367.08M	318.58M	447.75M
Investing Cash Flow	-1.20M	-10.59M	-286.29M	54.21M	-295.94M	-44.91M
Financing Cash Flow	-311.50M	-247.24M	-287.81M	-236.81M	-610.56M	-252.51M

Dolby Laboratories Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 63.98
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DLB, the sentiment is Negative. The current price of 63.98 is below the 20-day moving average (MA) of 64.09, below the 50-day MA of 64.46, and below the 200-day MA of 69.39, indicating a bearish trend. The MACD of 0.34 indicates Positive momentum. The RSI at 48.37 is Neutral, neither overbought nor oversold. The STOCH value of 11.53 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DLB.

Dolby Laboratories Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
INFY	80 Outperform	$61.18B	19.39	32.85%	2.58%	4.62%	1.06%
ACN	77 Outperform	$137.59B	18.49	25.35%	2.25%	6.58%	1.19%
DLB	74 Outperform	$6.19B	26.15	9.43%	2.05%	5.92%	-2.98%
CTSH	71 Outperform	$31.95B	14.65	15.16%	1.46%	7.44%	-4.57%
BR	67 Neutral	$20.80B	19.72	41.79%	1.63%	8.57%	35.02%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
IT	61 Neutral	$11.36B	16.26	86.85%	―	5.24%	-16.05%

Dolby Laboratories Corporate Events

Dolby Laboratories Stockholders Approve Directors, Pay and Auditor

At its 2026 Annual Meeting of Stockholders held via live webcast on February 3, 2026, Dolby Laboratories’ shareholders elected eight directors to serve until the 2027 annual meeting or until their successors are duly elected and qualified, reaffirming the company’s existing board composition. Stockholders also approved, on an advisory basis, the compensation of the company’s named executive officers and ratified the appointment of KPMG LLP as Dolby’s independent registered public accounting firm for the fiscal year ending September 25, 2026, signaling continued support for the company’s executive pay practices and its chosen external auditor under the firm’s dual-class share voting structure.

The most recent analyst rating on (DLB) stock is a Buy with a $71.00 price target. To see the full list of analyst forecasts on Dolby Laboratories stock, see the DLB Stock Forecast page.

Dolby Laboratories Reports Q1 2026 Results and Outlook

On January 29, 2026, Dolby Laboratories reported first-quarter fiscal 2026 revenue of $347 million, down from $357 million a year earlier, with GAAP net income slipping to $53 million, or $0.55 per diluted share, and non-GAAP earnings of $1.06 per share versus $1.14 in the prior-year quarter. The company underscored continued adoption of Dolby Atmos and Dolby Vision across automotive and streaming, highlighting uptake by more than 35 auto OEMs, new integrations with Mercedes-Benz, Mahindra and Qualcomm’s Gen 5 Snapdragon Automotive platform, as well as broader use of Dolby Vision and Atmos by Peacock, major TV brands including Hisense, TCL and TP Vision, LG’s new Dolby Atmos FlexConnect-based sound system, and Meta’s support for Dolby Vision on Facebook and Instagram. Dolby returned capital to shareholders by repurchasing about one million shares for roughly $70 million and declared a $0.36 per-share dividend payable on February 18, 2026 to stockholders of record on February 10, 2026, while issuing guidance for fiscal 2026 that envisions total revenue between $1.4 billion and $1.45 billion, very high gross margins near 90% and non-GAAP operating margins in the mid-30% range, despite acknowledging macroeconomic and geopolitical uncertainties that could weigh on royalty-based licensing revenue.

The most recent analyst rating on (DLB) stock is a Buy with a $90.00 price target. To see the full list of analyst forecasts on Dolby Laboratories stock, see the DLB Stock Forecast page.

Dolby Laboratories Reports Strong Q4 2025 Financial Results

On November 18, 2025, Dolby Laboratories announced its financial results for the fourth quarter and fiscal year 2025, reporting a total revenue of $307 million for the quarter and $1.35 billion for the year. The company highlighted growth in its Dolby Atmos and Dolby Vision technologies, as well as new partnerships and product launches, indicating a strong market position as it heads into fiscal year 2026.

The most recent analyst rating on (DLB) stock is a Buy with a $100.00 price target. To see the full list of analyst forecasts on Dolby Laboratories stock, see the DLB Stock Forecast page.

Dolby Laboratories Approves 2026 Executive Bonus Plan

On November 11, 2025, Dolby Laboratories‘ Compensation Committee approved the 2026 Executive Bonus Plan, targeting executive officers with bonuses based on a percentage of their base salary. The plan emphasizes achieving non-GAAP operating income and revenue goals, with potential adjustments by the Committee, impacting the final bonus amounts for executives.

The most recent analyst rating on (DLB) stock is a Buy with a $100.00 price target. To see the full list of analyst forecasts on Dolby Laboratories stock, see the DLB Stock Forecast page.