Dolby Laboratories, Inc. (NYSE:DLB) Second-Quarter Results: Here's What Analysts Are Forecasting For This Year

Investors in Dolby Laboratories, Inc. (NYSE:DLB) had a good week, as its shares rose 3.6% to close at US$82.08 following the release of its quarterly results. It was a credible result overall, with revenues of US$365m and statutory earnings per share of US$2.05 both in line with analyst estimates, showing that Dolby Laboratories is executing in line with 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.

View our latest analysis for Dolby Laboratories

After the latest results, the three analysts covering Dolby Laboratories are now predicting revenues of US$1.30b in 2024. If met, this would reflect a credible 2.2% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 33% to US$2.64. Before this earnings report, the analysts had been forecasting revenues of US$1.30b and earnings per share (EPS) of US$2.50 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of US$98.00, 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. The analysts are definitely expecting Dolby Laboratories' growth to accelerate, with the forecast 4.5% annualised growth to the end of 2024 ranking favourably alongside historical growth of 1.8% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 13% per year. 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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Dolby Laboratories analysts - going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Dolby Laboratories that you need to take into consideration.

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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.