Dolby Laboratories (NYSE:DLB) - Share price, News & Analysis

Q: What is the Fair Price of DLB when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

DLB ($70.82) is trading below our estimate of [[fair value]] ($119.76)

DLB fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	4/6
Past Performance	2/6
Financial Health	6/6
Dividends	2/6

DLB Stock Overview

Rewards

Trading at 40.9% below our estimate of its fair value

Earnings are forecast to grow 23.58% per year

Risk Analysis

Profit margins (17.1%) are lower than last year (24.8%)

Significant insider selling over the past 3 months

Dolby Laboratories Competitors

Datto Holding

NYSE:MSP

US$5.8b

NortonLifeLock

NasdaqGS:NLOK

US$12.7b

Qualys

NasdaqGS:QLYS

US$5.0b

Teradata

NYSE:TDC

US$3.9b

Price History & Performance

Summary of all time highs, changes and price drops for Dolby Laboratories
Historical stock prices
Current Share Price	US$70.82
52 Week High	US$104.25
52 Week Low	US$69.18
Beta	0.99
1 Month Change	-8.38%
3 Month Change	-10.46%
1 Year Change	-29.88%
3 Year Change	8.90%
5 Year Change	40.94%
Change since IPO	191.44%

Recent News & Updates

Jun 17

Is It Time To Consider Buying Dolby Laboratories, Inc. (NYSE:DLB)?

While Dolby Laboratories, Inc. ( NYSE:DLB ) might not be the most widely known stock at the moment, it received a lot...

May 18

Dolby Laboratories (NYSE:DLB) Will Want To Turn Around Its Return Trends

What trends should we look for it we want to identify stocks that can multiply in value over the long term? Amongst...

Shareholder Returns

	DLB	US Software	US Market
7D	-6.8%	-4.7%	-2.5%
1Y	-29.9%	-23.7%	-21.2%

Return vs Industry: DLB underperformed the US Software industry which returned -23.6% over the past year.

Return vs Market: DLB underperformed the US Market which returned -21.7% over the past year.

Price Volatility

Is DLB's price volatile compared to industry and market?
DLB volatility
DLB Average Weekly Movement	3.7%
Software Industry Average Movement	11.0%
Market Average Movement	8.1%
10% most volatile stocks in US Market	16.9%
10% least volatile stocks in US Market	3.2%

Stable Share Price: DLB is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: DLB's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1965	2,368	Kevin Yeaman	https://www.dolby.com

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 company develops and licenses its audio technologies, such as AAC & HE-AAC, a digital audio codec solution used for a range of media applications.; AVC, a digital video codec with high bandwidth efficiency used in various media devices; Dolby AC-4, an digital audio coding technology that delivers new audio experiences to a range of playback devices; and Dolby Atmos technology for cinema and a range of media devices. Its audio technologies also include Dolby Digital, a digital audio coding technology that provides multichannel sound to applications; Dolby Digital Plus, a digital audio coding technology that offers audio transmission for a range of media applications and devices; Dolby TrueHD, a digital audio coding technology providing encoding for media application; Dolby Vision, an imaging technology for cinema and media devices; Dolby Voice, an audio conferencing technology; and HEVC, a digital video codec with high bandwidth efficiency to support for media devices.

Dolby Laboratories Fundamentals Summary

How do Dolby Laboratories's earnings and revenue compare to its market cap?
DLB fundamental statistics
Market Cap	US$7.15b
Earnings (TTM)	US$215.55m
Revenue (TTM)	US$1.26b

33.2x

P/E Ratio

5.7x

P/S Ratio

Is DLB overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
DLB income statement (TTM)
Revenue	US$1.26b
Cost of Revenue	US$130.57m
Gross Profit	US$1.13b
Other Expenses	US$911.72m
Earnings	US$215.55m

Last Reported Earnings

Apr 01, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	2.14
Gross Margin	89.62%
Net Profit Margin	17.14%
Debt/Equity Ratio	0%

How did DLB perform over the long term?

See historical performance and comparison

Dividends

1.4%

Current Dividend Yield

46%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is DLB undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for DLB?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for DLB. This is calculated by dividing DLB's market cap by their current preferred multiple.
What is DLB's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$7.15b

DLB key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	4.9x
Enterprise Value/EBITDA	18.7x
PEG Ratio	1.4x

Price to Earnings Ratio vs Peers

How does DLB's PE Ratio compare to its peers?

DLB PE Ratio vs Peers

The above table shows the PE ratio for DLB vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	57.5x
MSP Datto Holding	132x	0.5%	US$5.8b
NLOK NortonLifeLock	15.2x	8.7%	US$12.7b
QLYS Qualys	52.4x	12.5%	US$5.0b
TDC Teradata	30.1x	22.0%	US$3.9b
DLB Dolby Laboratories	33.2x	23.6%	US$7.1b

Forward PE

Price-To-Earnings vs Peers: DLB is good value based on its Price-To-Earnings Ratio (33.2x) compared to the peer average (57.5x).

Price to Earnings Ratio vs Industry

How does DLB's PE Ratio compare vs other companies in the US Software Industry?

Price-To-Earnings vs Industry: DLB is good value based on its Price-To-Earnings Ratio (33.2x) compared to the US Software industry average (38.1x)

Price to Earnings Ratio vs Fair Ratio

What is DLB's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

DLB PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	33.2x
Fair PE Ratio	35.1x

Price-To-Earnings vs Fair Ratio: DLB is good value based on its Price-To-Earnings Ratio (33.2x) compared to the estimated Fair Price-To-Earnings Ratio (35.1x).

Share Price vs Fair Value

What is the Fair Price of DLB when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: DLB ($70.82) is trading below our estimate of fair value ($119.76)

Significantly Below Fair Value: DLB is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: DLB is poor value based on its PEG Ratio (1.4x)

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Future Growth

How is Dolby Laboratories forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

23.6%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: DLB's forecast earnings growth (23.6% per year) is above the savings rate (1.9%).

Earnings vs Market: DLB's earnings (23.6% per year) are forecast to grow faster than the US market (13.6% per year).

High Growth Earnings: DLB's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: DLB's revenue (8.8% per year) is forecast to grow faster than the US market (8.2% per year).

High Growth Revenue: DLB's revenue (8.8% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: DLB's Return on Equity is forecast to be low in 3 years time (17%).

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Past Performance

How has Dolby Laboratories performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

16.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: DLB has high quality earnings.

Growing Profit Margin: DLB's current net profit margins (17.1%) are lower than last year (24.8%).

Past Earnings Growth Analysis

Earnings Trend: DLB's earnings have grown by 16% per year over the past 5 years.

Accelerating Growth: DLB's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: DLB had negative earnings growth (-29.3%) over the past year, making it difficult to compare to the Software industry average (26.8%).

Return on Equity

High ROE: DLB's Return on Equity (8.3%) is considered low.

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Financial Health

How is Dolby Laboratories's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: DLB's short term assets ($1.6B) exceed its short term liabilities ($281.0M).

Long Term Liabilities: DLB's short term assets ($1.6B) exceed its long term liabilities ($176.8M).

Debt to Equity History and Analysis

Debt Level: DLB is debt free.

Reducing Debt: DLB has not had any debt for past 5 years.

Debt Coverage: DLB has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: DLB has no debt, therefore coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Dolby Laboratories's current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

1.41%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: DLB's dividend (1.41%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.61%).

High Dividend: DLB's dividend (1.41%) is low compared to the top 25% of dividend payers in the US market (4.3%).

Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, DLB has been paying a dividend for less than 10 years.

Growing Dividend: DLB's dividend payments have increased, but the company has only paid a dividend for 8 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (45.6%), DLB's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (32.2%), DLB's dividend payments are well covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

6.3yrs

Average management tenure

CEO

Kevin Yeaman (56 yo)

13.25yrs

Tenure

US$9,629,118

Compensation

Mr. Kevin J. Yeaman has been the Chief Executive Officer and President of Dolby Laboratories, Inc. since March 28, 2009 and serves as its Director since March 28, 2009. Mr. Yeaman served as the Chief Finan...

CEO Compensation Analysis

Compensation vs Market: Kevin's total compensation ($USD9.63M) is about average for companies of similar size in the US market ($USD8.30M).

Compensation vs Earnings: Kevin's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.

Leadership Team

Experienced Management: DLB's management team is seasoned and experienced (6.3 years average tenure).

Board Members

Experienced Board: DLB's board of directors are considered experienced (9.3 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: DLB insiders have only sold shares in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/07/01 00:00
End of Day Share Price	2022/07/01 00:00
Earnings	2022/04/01
Annual Earnings	2021/09/24