Analysts maintained their Dolby Laboratories fair value estimate at $68.00, with only minor adjustments to assumptions around discount rate, revenue growth, profit margin, and future P/E informing the updated price target rationale.
What's in the News
- Dolby updated earnings guidance for the second quarter of fiscal 2026, with total revenue estimated at US$375 million to US$405 million and GAAP diluted EPS expected at US$0.94 to US$1.09. For full year fiscal 2026, total revenue is expected at US$1.4b to US$1.45b and GAAP diluted EPS at US$2.71 to US$2.86 (Corporate guidance).
- The company reported progress under its long standing share repurchase program, buying back 1,044,838 shares, or 1.09% of shares, for US$70 million between September 27, 2025 and December 26, 2025, and reaching a cumulative 53,316,704 shares repurchased, or 51.71%, for US$3,094.61 million under the authorization announced on November 3, 2009 (Buyback tranche update).
- Dolby and NBCUniversal announced that Peacock will be the first streaming service to adopt Dolby's full suite of picture and sound technologies, including plans to extend Dolby Vision and Dolby Atmos across live sports and to support Dolby Vision 2 and Dolby AC 4, with rollout anticipated later this year (Client announcement).
- Dolby disclosed that The Movie Experience SLO in San Luis Obispo, CA will open a new Dolby Vision+Atmos auditorium, becoming the first U.S. theatrical exhibitor to announce adoption of the Dolby Vision+Atmos solution for a premium cinema offering (Client announcement).
- Dolby and LG introduced the LG Sound Suite home audio system featuring the H7 soundbar with Dolby Atmos FlexConnect, with LG planning support for Dolby Atmos FlexConnect across its latest premium TVs, including select 2025 models through a future software update, and announced a CES 2026 showcase from January 6 to 9 (Product announcement).
Valuation Changes
- Fair Value: Maintained at $68.00 per share, indicating no change to the central valuation anchor.
- Discount Rate: Adjusted slightly lower from 8.44% to 8.40%, reflecting a modest shift in the assumed cost of capital.
- Revenue Growth: Updated marginally higher from 5.69% to 5.76%, implying a small change in long term top line expectations.
- Net Profit Margin: Refined upward from 23.34% to 23.41%, a minor adjustment to long run profitability assumptions.
- Future P/E: Trimmed slightly from 21.86x to 21.73x, suggesting a modest change in the assumed earnings multiple applied to future results.
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