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Dolby Laboratories
(NYSE:DLB)
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Rating:71Outperform
Price Target:
$55.00
▼(-14.91% Downside)
Action:Reiterated
Date:05/03/26
DLB scores well on business quality and financial strength (strong margins and a very conservative balance sheet) and is supported by reasonable valuation and constructive guidance around licensing-driven growth. The main drag on the score is weak technical positioning with the stock trading below key moving averages, alongside modest growth and some recent cash-flow/margin softening.
Positive Factors
Conservative balance sheet
Dolby’s extremely low leverage (debt-to-equity ~0.019), $3.25B in assets and a large equity base provide durable financial flexibility. This conservative capital structure supports sustained R&D, licensing arrangements and capital returns without reliance on volatile debt markets over the next 2–6 months and beyond.
Negative Factors
Weakening cash-flow momentum
A ~22% decline in trailing free cash flow and FCF tracking below net income indicate timing or working-capital pressure. Persistent FCF softness would constrain discretionary investment or buybacks and reduce margin of safety for capital returns if trends continue across the next several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Conservative balance sheet
Dolby’s extremely low leverage (debt-to-equity ~0.019), $3.25B in assets and a large equity base provide durable financial flexibility. This conservative capital structure supports sustained R&D, licensing arrangements and capital returns without reliance on volatile debt markets over the next 2–6 months and beyond.
Read all positive factors
Dolby Laboratories Key Performance Indicators (KPIs)
Any
Remaining Performance Obligations
Represents the value of contracted revenue yet to be recognized, offering insight into future revenue streams and business stability.
Represents the value of contracted revenue yet to be recognized, offering insight into future revenue streams and business stability.
Data provided by:
The Fly
The FlyDolby Laboratories (DLB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.64B
Dividend Yield2.05%
Average Volume (3M)895.40K
Price to Earnings (P/E)19.2
Beta (1Y)0.80
Revenue Growth3.39%
EPS Growth-4.72%
CountryUS
Employees2,051
SectorIndustrials
Sector Strength72
IndustryInformation Technology Services
Share Statistics
EPS (TTM)2.56
Shares Outstanding60,346,214
10 Day Avg. Volume818,668
30 Day Avg. Volume895,402
Financial Highlights & Ratios
PEG Ratio-9.32
Price to Book (P/B)2.65
Price to Sales (P/S)5.14
P/FCF Ratio16.13
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$87.50Price Target Upside35.37% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)4.31
Revenue Forecast (FY)$1.41B
Dolby Laboratories Business Overview & Revenue Model
Company Description
Dolby Laboratories, Inc. develops pioneering audio and visual technologies designed to enhance entertainment and communication experiences across a broad spectrum of platforms. These include cinematic venues, digital television, various transmissi...
How the Company Makes Money
Dolby primarily makes money by licensing its proprietary technologies and collecting royalties tied to the use of Dolby audio and imaging solutions in products and content distribution. A major revenue stream comes from licensing agreements with c...
Dolby Laboratories Earnings Call Summary
Earnings Call Date:Apr 30, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Jul 30, 2026
Earnings Call Sentiment Positive
The call emphasized strong execution and secular momentum across content, devices and automotive, with revenue and EPS in line with guidance, healthy cash generation, and multiple growth initiatives (Dolby Vision 2, video distribution program, Dolby OptiView). Key growth drivers (Dolby Atmos/Vision and imaging patents) are expected to grow ~15% and constitute a large portion of licensing revenue. Near-term challenges include a 6% decline in mobile for the quarter, expected PC declines, reliance on licensing, quarter-to-quarter volatility from recoveries/MVCs, and macro/memory-price risks. Overall, the positives (broad ecosystem adoption, financial strength, product and program traction) outweigh the localized/short-term headwinds.Positive Updates
Top-line and EPS in Line with Guidance
Revenue of $396 million for the quarter and non-GAAP EPS of $1.37, both within the guidance provided last quarter; company is maintaining full-year guidance of $1.40B–$1.45B total revenue and non-GAAP EPS of $4.30–$4.45.
Negative Updates
Mobile Revenue Decline (Quarterly)
Mobile end market revenue was down 6% year-over-year in the quarter, attributed to timing of deals and SKU prioritization by customers.
Read all updates
Q2-2026 Updates
Positive
Negative
Top-line and EPS in Line with Guidance
Revenue of $396 million for the quarter and non-GAAP EPS of $1.37, both within the guidance provided last quarter; company is maintaining full-year guidance of $1.40B–$1.45B total revenue and non-GAAP EPS of $4.30–$4.45.
Read all positive updates
Company Guidance
Dolby said it is maintaining its fiscal 2026 guidance, forecasting total revenue of $1.40–$1.45 billion with licensing revenue of $1.295–$1.345 billion, non‑GAAP operating expenses of $780–$800 million (implying 50–100 bps of non‑GAAP operating margin improvement), and non‑GAAP EPS of $4.30–$4.45; it expects Dolby Atmos/Dolby Vision/imaging patents to grow roughly 15% and to comprise nearly half of licensing revenue while foundational revenue is down slightly, with end‑market growth driven by auto, the video distribution program and Dolby Cinema (broadcast and mobile expected up mid‑single digits, CE roughly flat, PC declining). For Q3 FY26 they guided revenue of $295–$325 million (licensing $270–$300 million), non‑GAAP gross margin ~88%, non‑GAAP operating expenses $200–$210 million, and non‑GAAP EPS $0.56–$0.71.Dolby Laboratories Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
92
Very Positive
Cash Flow
71
Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.36B | 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 | 380.95M | 378.56M | 399.81M | 345.57M | 318.89M | 450.37M |
| Net Income | 243.65M | 255.02M | 261.82M | 200.66M | 184.09M | 310.23M |
Balance Sheet | ||||||
| Total Assets | 3.25B | 3.23B | 3.13B | 2.99B | 2.70B | 3.12B |
| Cash, Cash Equivalents and Short-Term Investments | 594.74M | 702.60M | 577.75M | 957.11M | 817.58M | 1.27B |
| Total Debt | 49.69M | 38.88M | 46.99M | 50.65M | 50.94M | 72.12M |
| Total Liabilities | 622.36M | 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 | 258.10M | 430.26M | 297.25M | 336.74M | 259.12M | 393.30M |
| Operating Cash Flow | 337.83M | 472.20M | 327.25M | 367.08M | 318.58M | 447.75M |
| Investing Cash Flow | -73.18M | -10.59M | -286.29M | 54.21M | -295.94M | -44.91M |
| Financing Cash Flow | -346.51M | -247.24M | -287.81M | -236.81M | -610.56M | -252.51M |
Dolby Laboratories Technical Analysis
Negative
64.64
Price Trends
53.19
Negative
57.54
Negative
61.36
Negative
Market Momentum
-1.31
Positive
36.92
Neutral
33.89
Neutral
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 64.64 is above the 20-day moving average (MA) of 50.96, above the 50-day MA of 53.19, and above the 200-day MA of 61.36, indicating a bearish trend. The MACD of -1.31 indicates Positive momentum. The RSI at 36.92 is Neutral, neither overbought nor oversold. The STOCH value of 33.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DLB.
Dolby Laboratories Risk Analysis
Dolby Laboratories disclosed 11 risk factors in its most recent earnings report. Dolby Laboratories reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Dolby Laboratories Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $87.86B | 11.38 | 24.82% | 2.25% | 6.74% | -0.66% | |
76 Outperform | $17.34B | 15.91 | 40.06% | 1.63% | 8.19% | 40.01% | |
75 Outperform | $21.22B | 9.71 | 14.79% | 1.46% | 6.55% | -3.10% | |
71 Outperform | $4.64B | 19.17 | 9.34% | 2.05% | 3.39% | -4.72% | |
71 Outperform | $46.23B | 13.88 | 31.77% | 2.58% | 4.85% | 6.19% | |
70 Outperform | $9.39B | 13.83 | 119.81% | ― | 2.30% | -37.31% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
DLB
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Dolby Laboratories Corporate Events
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
Dolby Laboratories Posts Strong Q2 Results, Updates Outlook
Positive
Apr 30, 2026
On April 30, 2026, Dolby Laboratories reported second-quarter fiscal 2026 revenue of $396 million, up from $370 million a year earlier, with GAAP net income of $95 million, or $0.99 per diluted share, and non-GAAP net income of $131 million, or $1...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.