Dolby Laboratories (DLB) AI Stock Analysis

• Market Cap: $6.33B
• Dividend Yield: 2.04%
• Average Volume (3M): 655.64K
• Price to Earnings (P/E): 25.3
• Beta (1Y): 0.79
• Revenue Growth: 5.92%
• EPS Growth: -2.98%
• Country: US
• Employees: 2,080
• Sector: Industrials
• Sector Strength: 72
• Industry: Information Technology Services
• EPS (TTM): 0.99
• Shares Outstanding: 60,852,463
• 10 Day Avg. Volume: 710,319
• 30 Day Avg. Volume: 655,645
• PEG Ratio: -0.92
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 5.14
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.99
• Enterprise Value/Revenue: 4.64
• Enterprise Value/Gross Profit: 5.27
• Enterprise Value/Ebitda: 16.16
• 1Y Price Target: $90.00
• Price Target Upside: 36.76% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): 4.23
• Revenue Forecast (FY): $1.40B

• Rating: 74 Outperform
• Price Target: $75.00 ▲(13.96% Upside)

Dolby Laboratories' overall stock score reflects its strong financial performance and positive earnings call outlook, which are the most significant factors. The technical analysis suggests a neutral market position, while the valuation indicates a potential overvaluation. The company's strategic focus on expanding its advanced audio and visual products supports a positive long-term outlook.

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

Dolby Laboratories presents a strong financial position with robust revenue growth, efficient cost management, and solid cash flow generation. While the net profit margin and return on equity have shown some decline, the company's low leverage and strong equity base provide a stable foundation for future growth.

Income Statement

Dolby Laboratories shows a stable revenue growth rate of 2.19% in the latest year, recovering from a slight decline in previous years. The gross profit margin remains strong at 88.13%, indicating efficient cost management. However, the net profit margin has slightly decreased to 18.90% from 20.56% in the previous year, suggesting some pressure on net profitability. Overall, the income statement reflects a solid performance with room for improvement in net profitability.

Balance Sheet

The company maintains a healthy balance sheet with a low debt-to-equity ratio, indicating minimal leverage risk. The equity ratio is strong, reflecting a solid capital structure. However, the return on equity has decreased to 0%, which could be a concern if it persists. Overall, the balance sheet is robust, with a strong equity base and low debt levels.

Cash Flow

Dolby Laboratories has shown a significant improvement in free cash flow growth at 10.20%, indicating strong cash generation capabilities. The operating cash flow to net income ratio is not available, but the free cash flow to net income ratio suggests efficient cash management. Overall, the cash flow statement reflects a positive cash flow trajectory, supporting the company's financial stability.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.35B	1.35B	1.27B	1.30B	1.25B	1.28B
Gross Profit	1.19B	1.19B	1.13B	1.15B	1.11B	1.15B
EBITDA	387.80M	378.56M	399.81M	345.57M	318.89M	450.37M
Net Income	255.02M	255.02M	261.82M	200.66M	184.09M	310.23M
Balance Sheet
Total Assets	3.23B	3.23B	3.13B	2.99B	2.70B	3.12B
Cash, Cash Equivalents and Short-Term Investments	702.60M	702.60M	577.75M	957.11M	817.58M	1.27B
Total Debt	38.88M	38.88M	46.99M	50.65M	50.94M	72.12M
Total Liabilities	595.81M	595.81M	643.72M	622.38M	451.15M	518.66M
Stockholders Equity	2.62B	2.62B	2.48B	2.36B	2.25B	2.60B
Cash Flow
Free Cash Flow	430.26M	430.26M	297.25M	336.74M	259.12M	393.30M
Operating Cash Flow	472.20M	472.20M	327.25M	367.08M	318.58M	447.75M
Investing Cash Flow	-10.59M	-10.59M	-286.29M	54.21M	-295.94M	-44.91M
Financing Cash Flow	-247.24M	-247.24M	-287.81M	-236.81M	-610.56M	-252.51M

Dolby Laboratories Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 65.81
• 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 65.81 is below the 20-day moving average (MA) of 66.87, below the 50-day MA of 66.51, and below the 200-day MA of 72.15, indicating a bearish trend. The MACD of 0.03 indicates Positive momentum. The RSI at 45.95 is Neutral, neither overbought nor oversold. The STOCH value of 15.86 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
CTSH	79 Outperform	$41.22B	19.80	14.50%	1.46%	7.44%	-4.57%
ACN	79 Outperform	$179.80B	22.51	25.35%	2.25%	6.58%	1.19%
BR	78 Outperform	$26.38B	28.90	38.21%	1.63%	8.57%	35.02%
INFY	76 Outperform	$74.19B	25.62	29.15%	2.50%	4.62%	1.06%
DLB	74 Outperform	$6.33B	25.32	10.00%	2.04%	5.92%	-2.98%
IT	67 Neutral	$18.07B	21.96	109.26%	―	5.24%	-16.05%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Dolby Laboratories Corporate Events

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.

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.