Dolby Laboratories (DLB)
NYSE:DLB
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Dolby Laboratories
(NYSE:DLB)
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Rating:74Outperform
Price Target:
$65.00
▲(5.81% Upside)
Action:ReiteratedDate:02/07/26
The score is driven primarily by strong financial quality (high margins and very low leverage) and a constructive earnings update with raised FY guidance and visible momentum in strategic licensing areas. Offsetting this are mixed-to-weak technical signals (negative MACD and price below longer-term averages) and a valuation that looks fair-to-slightly expensive given recent TTM growth variability.
Positive Factors
High Gross & Operating Margins
Dolby’s IP licensing model yields sustainably high gross margins (~88%) and healthy operating profitability, enabling persistent cash generation and funding for R&D, product certification, and partnerships. High margins reduce sensitivity to revenue swings and support long-term reinvestment.
Negative Factors
TTM Revenue Weakness & Volatility
Trailing-twelve-month revenue contraction signals timing and demand variability in royalties; because licensing revenue depends on device and content cycles, persistent TTM declines reduce visibility into sustainable top-line growth and can pressure long-term investment planning and margin leverage.
Read all positive and negative factors
Positive Factors
Negative Factors
High Gross & Operating Margins
Dolby’s IP licensing model yields sustainably high gross margins (~88%) and healthy operating profitability, enabling persistent cash generation and funding for R&D, product certification, and partnerships. High margins reduce sensitivity to revenue swings and support long-term reinvestment.
Read all positive factors
Dolby Laboratories (DLB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.87B
Dividend Yield2.05%
Average Volume (3M)631.88K
Price to Earnings (P/E)29.4
Beta (1Y)0.84
Revenue Growth5.92%
EPS Growth-2.98%
CountryUS
Employees2,080
SectorIndustrials
Sector Strength72
IndustryInformation Technology Services
Share Statistics
EPS (TTM)1.06
Shares Outstanding60,884,770
10 Day Avg. Volume505,314
30 Day Avg. Volume631,882
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 Cap0.89
Enterprise Value/Revenue3.92
Enterprise Value/Gross Profit4.46
Enterprise Value/Ebitda13.85
Forecast
1Y Price Target
$90.00Price Target Upside46.51% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)4.34
Revenue Forecast (FY)$1.41B
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 compan...
How the Company Makes Money
Dolby primarily makes money by licensing its intellectual property and technologies to companies across the media and electronics value chain. The company’s largest revenue stream is licensing: (1) device licensing/royalties, where manufacturers o...
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 Earnings Call Summary
Earnings Call Date:Jan 29, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Positive
The call presented a solid quarter with revenue and EPS above guidance, a raised full-year revenue range, clear momentum in strategic growth areas (mobile, automotive, Dolby Vision 2, OptiView) and strengthening partnerships (Qualcomm, Peacock, Roku, Meta). Offsetting items include mid-teens decline in Broadcast for the quarter, expected weakness in PC and CE for the year, a $10M restructuring charge, and some macro uncertainty (memory pricing) that could cause near-term variability. On balance, positive operational and commercial developments coupled with raised guidance and strong foundational technology adoption outweigh the challenges and near-term volatility.Positive Updates
Revenue and EPS Beat Guidance
Q1 revenue of $347 million came in above the high end of guidance; non-GAAP EPS was $1.06, also above the high end of guidance. A $7M favorable true-up for prior shipments contributed to the upside.
Negative Updates
Broadcast Revenue Decline in Q1
Broadcast revenue was down mid-teens year-over-year in Q1, driven primarily by deal timing.
Read all updates
Q1-2026 Updates
Positive
Negative
Revenue and EPS Beat Guidance
Q1 revenue of $347 million came in above the high end of guidance; non-GAAP EPS was $1.06, also above the high end of guidance. A $7M favorable true-up for prior shipments contributed to the upside.
Read all positive updates
Company Guidance
Dolby said Q1 came in ahead of expectations with revenue of $347 million (licensing $320M; Products & Services $27M), non‑GAAP EPS $1.06, ~ $55M of operating cash flow, $70M of share repurchases (with $207M remaining authorization), a $0.36 dividend (up 9% YoY), and ~$730M of cash & investments; GAAP Opex included a $10M restructuring charge and a ~$7M favorable true‑up. For FY‑26 the company raised guidance to $1.40–1.45B revenue (licensing $1.295–1.345B), targets non‑GAAP Opex of $780–800M (implying 50–100 bps of operating margin improvement), non‑GAAP EPS of $4.30–4.45, and reiterated that Dolby Atmos/Dolby Vision/imaging patents are expected to grow roughly 15% (the company has previously cited 15–20% p.a.) and now comprise nearly half of licensing revenue. Q2 guidance is $375–405M revenue (licensing $350–380M, including a large recovery), ~91% non‑GAAP gross margin, non‑GAAP Opex $195–205M and EPS $1.29–1.44. Management noted end‑market trends: Mobile grew >20% YoY in Q1 (expected mid‑single digit for the year), Broadcast was down mid‑teens (expected full‑year up mid‑single digits), while PC and CE are expected to decline.Dolby Laboratories Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
92
Very Positive
Cash Flow
73
Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.34B | 1.35B | 1.27B | 1.30B | 1.25B | 1.28B |
| Gross Profit | 1.18B | 1.19B | 1.13B | 1.15B | 1.11B | 1.15B |
| EBITDA | 379.08M | 378.56M | 399.81M | 345.57M | 318.89M | 450.37M |
| Net Income | 240.52M | 255.02M | 261.82M | 200.66M | 184.09M | 310.23M |
Balance Sheet | ||||||
| Total Assets | 3.19B | 3.23B | 3.13B | 2.99B | 2.70B | 3.12B |
| Cash, Cash Equivalents and Short-Term Investments | 644.58M | 702.60M | 577.75M | 957.11M | 817.58M | 1.27B |
| Total Debt | 40.64M | 38.88M | 46.99M | 50.65M | 50.94M | 72.12M |
| Total Liabilities | 589.25M | 595.81M | 643.72M | 622.38M | 451.15M | 518.66M |
| Stockholders Equity | 2.59B | 2.62B | 2.48B | 2.36B | 2.25B | 2.60B |
Cash Flow | ||||||
| Free Cash Flow | 379.68M | 430.26M | 297.25M | 336.74M | 259.12M | 393.30M |
| Operating Cash Flow | 420.22M | 472.20M | 327.25M | 367.08M | 318.58M | 447.75M |
| Investing Cash Flow | -1.20M | -10.59M | -286.29M | 54.21M | -295.94M | -44.91M |
| Financing Cash Flow | -311.50M | -247.24M | -287.81M | -236.81M | -610.56M | -252.51M |
Dolby Laboratories Technical Analysis
Neutral
61.43
Price Trends
62.97
Negative
63.96
Negative
67.49
Negative
Market Momentum
-0.66
Negative
49.97
Neutral
80.36
Negative
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 61.43 is above the 20-day moving average (MA) of 60.57, below the 50-day MA of 62.97, and below the 200-day MA of 67.49, indicating a neutral trend. The MACD of -0.66 indicates Negative momentum. The RSI at 49.97 is Neutral, neither overbought nor oversold. The STOCH value of 80.36 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $5.87B | 29.41 | 9.26% | 2.05% | 5.92% | -2.98% | |
74 Outperform | $119.01B | 17.31 | 24.82% | 2.25% | 6.58% | 1.19% | |
73 Outperform | $58.96B | 24.55 | 29.68% | 2.58% | 4.62% | 1.06% | |
72 Outperform | $18.79B | 22.90 | 41.06% | 1.63% | 8.57% | 35.02% | |
68 Neutral | $29.17B | 17.90 | 14.84% | 1.46% | 7.44% | -4.57% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
61 Neutral | $10.53B | 24.91 | 74.65% | ― | 5.24% | -16.05% |
* Industrials Sector Average
DLB
Dolby Laboratories
61.43
-9.72
-13.66%
ACN
Accenture
193.84
-86.49
-30.85%
BR
Broadridge Financial Solutions
160.97
-63.50
-28.29%
CTSH
Cognizant
61.00
-7.28
-10.66%
IT
Gartner
149.40
-242.63
-61.89%
INFY
Infosys
14.00
-2.56
-15.48%
Dolby Laboratories Corporate Events
Executive/Board ChangesShareholder Meetings
Dolby Laboratories Stockholders Approve Directors, Pay and Auditor
Positive
Feb 6, 2026
At its 2026 Annual Meeting of Stockholders held via live webcast on February 3, 2026, Dolby Laboratories’ shareholders elected eight directors to serve until the 2027 annual meeting or until their successors are duly elected and qualified, r...
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
Dolby Laboratories Reports Q1 2026 Results and Outlook
Neutral
Jan 29, 2026
On January 29, 2026, Dolby Laboratories reported first-quarter fiscal 2026 revenue of $347 million, down from $357 million a year earlier, with GAAP net income slipping to $53 million, or $0.55 per diluted share, and non-GAAP earnings of $1.06 per...
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.