Dolby Laboratories, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Dolby Laboratories, Inc. (NYSE:DLB) just released its latest first-quarter results and things are looking bullish. The company beat forecasts, with revenue of US$357m, some 3.3% above estimates, and statutory earnings per share (EPS) coming in at US$0.70, 21% ahead of expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Dolby Laboratories

Taking into account the latest results, the consensus forecast from Dolby Laboratories' three analysts is for revenues of US$1.36b in 2025. This reflects a credible 3.0% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to grow 18% to US$3.23. In the lead-up to this report, the analysts had been modelling revenues of US$1.36b and earnings per share (EPS) of US$2.51 in 2025. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the great increase in earnings per share expectations following these results.

There's been no major changes to the consensus price target of US$100.00, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Dolby Laboratories' rate of growth is expected to accelerate meaningfully, with the forecast 4.1% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 1.2% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 12% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, Dolby Laboratories is expected to grow slower than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Dolby Laboratories' earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Dolby Laboratories' revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$100.00, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Dolby Laboratories going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Dolby Laboratories (1 can't be ignored!) that you need to be mindful of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.