Dolby Laboratories (DLB) AI Stock Analysis

• Market Cap: $6.40B
• Dividend Yield: 2.01%
• Average Volume (3M): 614.01K
• Price to Earnings (P/E): 25.6
• Beta (1Y): 0.78
• 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: 60,845,844
• 10 Day Avg. Volume: 523,359
• 30 Day Avg. Volume: 614,014
• 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: 0.98
• 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): N/A
• Revenue Forecast (FY): N/A

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

Dolby Laboratories' overall stock score reflects a strong financial foundation and positive earnings outlook, supported by robust revenue growth and strategic product engagement. While technical indicators suggest a neutral trend, the company's valuation remains reasonable, and the earnings call provides a positive forward-looking sentiment.

Positive Factors

Strong Engagement with Dolby Atmos and Dolby Vision

High engagement with Dolby Atmos and Vision indicates robust demand and adoption, enhancing Dolby's competitive position and revenue potential across entertainment sectors.

Automotive Expansion

Integration into automotive brands expands Dolby's market reach and diversifies revenue streams, capitalizing on the growing demand for advanced in-car entertainment systems.

Cash Flow Generation

Strong free cash flow growth enhances financial stability, providing resources for investment in innovation and strategic initiatives, supporting long-term growth.

Negative Factors

Foundational Audio Technology Revenue Decline

Decline in foundational audio technology revenue suggests challenges in maintaining growth in legacy segments, potentially impacting overall revenue diversification.

Decline in Consumer Electronics and PCs

Decline in consumer electronics and PCs indicates market challenges and could affect Dolby's revenue from these segments, impacting growth prospects.

Q1 Fiscal 2026 Revenue Guidance

Projected revenue decline for Q1 2026 suggests potential short-term headwinds, which may affect investor confidence and strategic planning.

Dolby Laboratories Business Overview & Revenue Model

Company Description

Dolby Laboratories (DLB) is a global leader in audio and imaging technologies, specializing in creating and delivering high-quality sound and visual experiences across various sectors, including film, television, gaming, and consumer electronics. The company is renowned for its innovative technologies, such as Dolby Atmos, Dolby Vision, and Dolby Audio, which enhance the way content is produced, delivered, and consumed. Dolby operates in multiple markets, including entertainment, automotive, and mobile, providing solutions that enrich user experiences and foster creativity in content creation.

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: Neutral
• Last Price: 65.81
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DLB, the sentiment is Neutral. The current price of 65.81 is below the 20-day moving average (MA) of 65.89, below the 50-day MA of 67.35, and below the 200-day MA of 72.89, indicating a neutral trend. The MACD of -0.07 indicates Negative momentum. The RSI at 53.66 is Neutral, neither overbought nor oversold. The STOCH value of 39.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for DLB.

Dolby Laboratories Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ACN	80 Outperform	$165.32B	21.94	25.82%	2.28%	7.36%	6.18%
BR	80 Outperform	$27.08B	29.67	38.21%	1.56%	8.57%	35.02%
CTSH	80 Outperform	$38.96B	18.71	14.50%	1.54%	7.44%	-4.57%
INFY	76 Outperform	$74.62B	22.90	29.15%	2.65%	4.62%	1.06%
DLB	74 Outperform	$6.40B	25.61	10.00%	2.01%	5.92%	-2.98%
IT	67 Neutral	$16.56B	20.14	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.