Dolby Laboratories (DLB) AI Stock Analysis

• Market Cap: $6.87B
• Dividend Yield: 1.84%
• Average Volume (3M): 416.22K
• Price to Earnings (P/E): 26.5
• Beta (1Y): 0.83
• Revenue Growth: 6.94%
• EPS Growth: 24.05%
• Country: US
• Employees: 2,080
• Sector: Industrials
• Sector Strength: 78
• Industry: Information Technology Services
• EPS (TTM): 0.78
• Shares Outstanding: 61,184,140
• 10 Day Avg. Volume: 493,240
• 30 Day Avg. Volume: 416,219
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.94
• Enterprise Value/Revenue: 4.90
• Enterprise Value/Gross Profit: 5.51
• Enterprise Value/Ebitda: 17.55
• 1Y Price Target: $98.75
• Price Target Upside: 37.77% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

• Rating: 77 Outperform
• Price Target: $86.00 ▲(19.98% Upside)

Dolby Laboratories' strong financial performance and positive earnings call sentiment are significant strengths, but the technical analysis suggests cautious trading, and valuation concerns slightly dampen the outlook. Despite macroeconomic uncertainties, the company's strategic partnerships and growth in high-potential segments are promising.

Positive Factors

Automotive Sector Expansion

DLB is rapidly expanding its footprint in the automotive sector, transforming vehicles into immersive entertainment hubs and driving a major growth vertical.

Licensing Revenues

Licensing revenues grew 8.5%, indicating strong performance in this area.

Shareholder Returns

DLB's strong balance sheet and cash flow continue to fund new product development and opportunistic acquisitions, enhancing shareholder returns with periodic dividend increases and share repurchases.

Negative Factors

Economic Backdrop

Despite a cloudy economic backdrop, Dolby managed to improve its overall revenue, aligning with estimates and surpassing expectations in gross profits and EPS.

Macro Environment

The macro environment creates uncertainty for device volume trends, which can significantly impact Dolby's revenue from widely distributed technologies.

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 various manufacturers and content creators in the entertainment industry. Companies that produce consumer electronics, such as TVs, smartphones, and personal computers, pay Dolby licensing fees to incorporate its audio and visual technologies into their devices. Additionally, Dolby earns revenue from cinema operators who utilize its advanced sound systems and cinemas like Dolby Cinema. The company also receives income from its own products and services, including Dolby.io, a platform offering media processing and real-time streaming solutions. Significant partnerships with leading electronics manufacturers, streaming services, and film studios further bolster Dolby's revenue, as these collaborations expand the reach and application of its technologies globally.

Dolby Laboratories Financial Statement Overview

Summary

Dolby Laboratories exhibits strong financial health with a robust balance sheet characterized by low debt, high equity, and solid profitability indicators. However, the slight decline in net income poses some risk for future cash flow consistency.

Income Statement

Dolby Laboratories showcases strong income statement metrics with a notable gross profit margin of approximately 88.9% for TTM, indicating efficient cost control. The net profit margin stands at a robust 19.4%, demonstrating profitability. Revenue growth is evident with a 3.6% increase from the previous year. However, the net income for TTM decreased compared to last year, suggesting some challenges in maintaining profit levels.

Balance Sheet

The balance sheet is solid with a low debt-to-equity ratio of 0.016, highlighting minimal leverage risk. The equity ratio is strong at 79.7%, indicating financial stability. Return on equity (ROE) is 10% in the TTM period, suggesting effective use of equity to generate profits. Overall, the company's balance sheet reflects a sound financial position with low debt levels and high equity.

Cash Flow

Dolby Laboratories presents a positive cash flow scenario with a significant free cash flow growth rate of 31.3% in the TTM period. The operating cash flow to net income ratio is 1.63, showing strong cash generation relative to income. The free cash flow to net income ratio is also favorable at 1.52. However, fluctuations in net income suggest potential variability in future cash flows.

Breakdown	TTM	Dec 2024	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement
Total Revenue	1.32B	1.27B	1.25B	1.28B	1.16B	1.24B
Gross Profit	1.17B	1.13B	1.11B	1.15B	1.02B	1.08B
EBITDA	368.50M	258.33M	329.90M	464.12M	332.60M	404.16M
Net Income	256.63M	360.64M	184.09M	310.23M	231.36M	255.15M
Balance Sheet
Total Assets	3.23B	3.11B	2.69B	3.11B	2.92B	2.82B
Cash, Cash Equivalents and Short-Term Investments	626.55M	482.05M	809.34M	1.26B	1.12B	916.36M
Total Debt	40.43M	46.99M	50.94M	72.12M	81.14M	0.00
Total Liabilities	646.02M	623.03M	438.53M	501.45M	478.92M	508.72M
Stockholders Equity	2.57B	2.48B	2.25B	2.60B	2.43B	2.31B
Cash Flow
Free Cash Flow	390.44M	297.25M	259.12M	393.30M	274.86M	214.14M
Operating Cash Flow	419.11M	327.25M	318.58M	447.75M	343.85M	327.67M
Investing Cash Flow	-251.30M	-286.29M	-295.94M	-44.91M	134.37M	-56.23M
Financing Cash Flow	-240.96M	-287.81M	-610.56M	-252.51M	-207.78M	-385.28M

Dolby Laboratories Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 71.68
• 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 71.68 is below the 20-day moving average (MA) of 72.82, below the 50-day MA of 73.93, and below the 200-day MA of 76.61, indicating a bearish trend. The MACD of -0.35 indicates Positive momentum. The RSI at 42.34 is Neutral, neither overbought nor oversold. The STOCH value of 11.35 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
G	79 Outperform	$7.90B	14.92	21.86%	1.42%	7.37%	-14.64%
EPAM	78 Outperform	$9.82B	25.15	11.36%	―	9.73%	-0.29%
DLB	77 Outperform	$6.87B	26.51	10.49%	1.84%	6.94%	24.05%
CACI	76 Outperform	$10.55B	21.47	13.49%	―	12.64%	19.79%
JKHY	68 Neutral	$11.90B	26.17	22.94%	1.38%	7.21%	19.35%
DXC	68 Neutral	$2.59B	7.04	12.60%	―	-4.93%	497.03%
Sector *	64 Neutral	$10.84B	16.09	8.89%	1.97%	2.67%	-15.04%

Dolby Laboratories Corporate Events

Dolby Laboratories Announces Cash Dividend and Strong Q3 Results

On July 31, 2025, Dolby Laboratories announced a cash dividend of $0.33 per share for its Class A and B Common Stock, payable on August 20, 2025. The company reported strong financial results for the third quarter of fiscal 2025, with a total revenue of $316 million, up from $289 million in the same quarter of the previous year. Dolby’s net income also increased, and the company repurchased approximately 526,000 shares of its common stock. Recent business highlights include partnerships with major companies like Audi, Motorola, and Xiaomi, and the launch of new products featuring Dolby technology. The company also provided financial estimates for the fourth quarter and full year of fiscal 2025, highlighting potential uncertainties due to macroeconomic factors.

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.