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Dolby Laboratories (DLB)
NYSE:DLB
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Dolby Laboratories
(NYSE:DLB)
72Outperform
Positive Factors
Automotive Technology Adoption
A growing array of OEM partners are incorporating Dolby Atmos in Auto, both domestically and internationally, with progress across the Android ecosystem.
Cinema Experience
Dolby Cinema is benefiting from consumer appetite for the premium experience, with over 80% of domestic box office films shown in Dolby Cinema.
Negative Factors
Guidance and Forecast
The company modestly lowered its guidance for fiscal 2025 due to uncertainties in consumer demand and device mix.
Revenue Performance
Second-quarter revenues were slightly below the Street due to the macro environment, and product and services revenue declined about 10.4% year-over-year.
Dolby Laboratories (DLB) vs. S&P 500 (SPY)
Market Cap
$7.22B
Dividend Yield1.68%
Average Volume (3M)455.39K
Price to Earnings (P/E)27.6
Beta (1Y)0.77
Revenue Growth2.71%
EPS Growth39.56%
CountryUS
Employees2,080
SectorIndustrials
Sector Strength79
IndustryInformation Technology Services
Share Statistics
EPS (TTM)2.71
Shares Outstanding61,206,300
10 Day Avg. Volume432,989
30 Day Avg. Volume455,392
Financial Highlights & Ratios
PEG Ratio0.70
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap0.98
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit6.24
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$97.50Price Target Upside30.23% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
Dolby Laboratories Business Overview & Revenue Model
Company DescriptionDolby Laboratories, Inc. (DLB) is a global leader in audio, imaging, and voice technologies for cinemas, home theaters, PCs, mobile devices, and gaming systems. Founded in 1965, the company specializes in developing innovative technologies that enhance audio and visual experiences. Dolby's core products and services include Dolby Atmos, Dolby Vision, and Dolby Cinema, which are widely adopted by filmmakers, broadcasters, and device manufacturers worldwide to deliver superior sound and picture quality.
How the Company Makes MoneyDolby Laboratories makes money primarily through licensing its audio and imaging technologies to a wide range of partners, including consumer electronics manufacturers, content creators, and broadcasters. The company generates significant revenue by licensing its technologies, such as Dolby Atmos and Dolby Vision, to enhance the audio and visual capabilities of products like televisions, smartphones, and gaming consoles. Additionally, Dolby earns revenue from its cinema products and services, including Dolby Cinema, which offers a premium movie-watching experience. The company also benefits from strategic partnerships with major entertainment companies, enabling it to extend its reach and influence across the film and entertainment industries.
Dolby Laboratories Financial Statement Overview
Summary
Dolby Laboratories exhibits a strong financial position with robust profitability, minimal leverage, and efficient cash flow management. The income statement reflects strong margins and stable revenue growth, while the balance sheet showcases a solid capital structure with low financial risk. Cash flow metrics indicate healthy liquidity. There is potential for improvement in revenue growth and ROE.Income Statement
Dolby Laboratories shows a strong income statement with a healthy gross profit margin of 88.96% and net profit margin of 20.55% in the TTM (Trailing-Twelve-Months), indicating efficient cost management and profitability. Revenue growth is modest at 1.59% from the previous year, suggesting stable business operations. The EBIT and EBITDA margins are solid at 20.18% and 26.88%, respectively, reflecting strong operational performance. However, the pace of revenue growth could be improved for a higher score.76
Positive
Balance Sheet
The balance sheet of Dolby Laboratories is robust, with a low debt-to-equity ratio of 0.02, indicating minimal leverage and financial risk. The equity ratio is high at 79.67%, showcasing a strong capital structure. Return on Equity (ROE) is a decent 10.57%, driven by steady profitability. The company maintains substantial equity, offering financial stability and flexibility. Improvement in ROE through higher profit margins could enhance the overall score.82
Very Positive
Cash Flow
Dolby Laboratories demonstrates strong cash flow management, with a free cash flow growth rate of 14.71% and healthy operating cash flow to net income ratio of 1.25 in the TTM. The free cash flow to net income ratio of 1.14 further underscores efficient cash generation relative to net earnings. The company effectively converts its profits into cash, supporting liquidity and operational flexibility. Continued focus on cash flow improvement will be beneficial.78
Positive
| Breakdown | ||||
| Sep 2024 | Sep 2022 | Sep 2021 | Sep 2020 | Sep 2019 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.27B | 1.25B | 1.28B | 1.16B | 1.24B | Gross Profit |
| 1.13B | 1.11B | 1.15B | 1.02B | 1.08B | EBIT |
| 258.33M | 206.60M | 344.39M | 218.74M | 257.08M | EBITDA |
| 258.33M | 329.90M | 464.12M | 332.60M | 404.16M | Net Income Common Stockholders |
| 360.64M | 184.09M | 310.23M | 231.36M | 255.15M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 482.05M | 809.34M | 1.26B | 1.12B | 916.36M | Total Assets |
| 3.11B | 2.69B | 3.11B | 2.92B | 2.82B | Total Debt |
| 46.99M | 50.94M | 72.12M | 81.14M | 0.00 | Net Debt |
| -435.06M | -569.18M | -1.15B | -990.74M | -797.21M | Total Liabilities |
| 623.03M | 438.53M | 501.45M | 478.92M | 508.72M | Stockholders Equity |
| 2.48B | 2.25B | 2.60B | 2.43B | 2.31B |
| Cash Flow | Free Cash Flow | |||
| 297.25M | 259.12M | 393.30M | 274.86M | 214.14M | Operating Cash Flow |
| 327.25M | 318.58M | 447.75M | 343.85M | 327.67M | Investing Cash Flow |
| -286.29M | -295.94M | -44.91M | 134.37M | -56.23M | Financing Cash Flow |
| -287.81M | -610.56M | -252.51M | -207.78M | -385.28M |
Dolby Laboratories Technical Analysis
Negative
74.87
Price Trends
78.29
Negative
79.29
Negative
76.45
Negative
Market Momentum
-0.63
Negative
46.35
Neutral
78.50
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 74.87 is above the 20-day moving average (MA) of 73.66, below the 50-day MA of 78.29, and below the 200-day MA of 76.45, indicating a neutral trend. The MACD of -0.63 indicates Negative momentum. The RSI at 46.35 is Neutral, neither overbought nor oversold. The STOCH value of 78.50 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 13 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
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $3.08T | 32.64 | 138.02% | 0.49% | 2.61% | -2.14% | |
72 Outperform | $7.22B | 27.62 | 10.28% | 1.68% | 2.71% | 39.56% | |
64 Neutral | $8.98B | ― | -4.34% | ― | 18.03% | 82.15% | |
64 Neutral | $4.28B | 11.80 | 5.33% | 250.46% | 4.10% | -9.26% | |
58 Neutral | $6.92B | ― | -37.30% | 5.24% | -2.84% | -249.80% | |
48 Neutral | $1.13B | ― | -12.95% | ― | -8.74% | -2452.05% |
* Industrials Sector Average
Performance Comparison
DLB
Dolby Laboratories
74.87
-5.84
-7.24%
AAPL
Apple
205.35
24.49
13.54%
SIRI
Sirius XM Holdings
20.47
-10.14
-33.13%
ROKU
Roku
61.55
1.22
2.02%
SONO
Sonos
9.46
-8.42
-47.09%
Dolby Laboratories Earnings Call Summary
Earnings Call Date:May 01, 2025
(Q2-2025)
| % Change Since: -1.72%|
Next Earnings Date:Aug 12, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mixed outlook. Dolby Laboratories showed strong performance in the automotive, mobile, and TV sectors, with important partnerships and new product launches. However, macroeconomic uncertainties have led to a revised revenue forecast, and product and services revenue showed a year-over-year decline.Q2-2025 Updates
Positive Updates
Automotive Segment Expansion
Porsche, Cadillac, Volvo, Xiaomi, and Hyundai announced new models incorporating Dolby Atmos and Dolby Vision. Two additional manufacturers, NIO and Zeekr, integrated Dolby Vision, totaling three brands and nine car models.
Positive Revenue and Earnings Results
Q2 revenue was $370 million, aligning with guidance, and a 1% increase year-over-year, with licensing revenue up 2%. Non-GAAP earnings per share were $1.34, a 5% increase year-over-year.
Mobile and TV Ecosystem Growth
Continued expansion of Dolby Vision support in smartphones, with new partners in China and additional models from OPPO, Realme, and Xiaomi. In the TV sector, new models from LG, Sharp, and Hisense now support Dolby Vision.
Cinema and Content Distribution
New Dolby Atmos and Dolby Vision theaters announced in India and South Korea, with expansion in the U.S. through AMC partnership. Major events like the Super Bowl and March Madness were broadcast in Dolby Atmos and Vision.
Strong Financial Position
Dolby repurchased $35 million worth of common stock and declared a dividend increase of 10% to $0.33 per share.
Negative Updates
Revised Revenue Forecast
Revenue guidance for the full year was revised downwards to $1.31 billion - $1.38 billion from the previous $1.33 billion - $1.39 billion due to macroeconomic uncertainties.
Product and Services Revenue Decline
Products and services revenue decreased by 10% year-over-year, slightly below the midpoint of guidance.
Limited Forecast Visibility
The economic environment and consumer spending uncertainties have limited the ability to forecast with precision, affecting revenue projections.
Impact of Macroeconomic Environment
Potential impact of macroeconomic factors on consumer device shipments could reduce revenue by approximately $15 million to $25 million for the remainder of the year.
Company Guidance
In the recent Dolby Laboratories earnings call discussing the second quarter of fiscal year 2025, several key metrics and guidance updates were provided. The company reported Q2 revenue of $370 million, aligning with the midpoint of their guidance, and a 1% year-over-year increase. Licensing revenue was $346 million, up 2% from the previous year, while products and services revenue came in at $24 million, a 10% decline. Non-GAAP earnings per share reached $1.34, marking a 5% annual increase. For fiscal year 2025, Dolby revised its revenue guidance range from $1.33-$1.39 billion to $1.31-$1.38 billion, citing macroeconomic uncertainties. The company anticipates Q3 revenue between $290 million and $320 million, with licensing revenue expected to be $265 million to $295 million. Full-year non-GAAP EPS is projected to be between $3.88 and $4.03. The guidance reflects expected headwinds due to potential changes in consumer spending and device shipments, influenced by economic conditions and trade factors.Dolby Laboratories Corporate Events
Executive/Board Changes
Dolby Laboratories Unveils 2025 Executive Bonus Plan
Neutral
Nov 15, 2024
Dolby Laboratories has introduced the 2025 Executive Bonus Plan, offering cash bonuses to selected executives based on a percentage of their base salary and the achievement of specific financial goals. The CEO’s bonus is set at 100% of his base salary, while other eligible officers have a target of 65%. The actual payout can vary, influenced by the company’s performance and other discretionary factors, with funding capped at 150% of the target. This plan aligns with the Dolby 2020 Stock Plan, ensuring bonuses do not exceed established limits.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.