Dolby Laboratories is rated Buy due to its high margins, robust buyback program, and undervalued share price despite weak growth. DLB's 90% gross margin and operating leverage enable EPS growth even with modest revenue increases and stagnant licensing. Share repurchases—authorized up to $427 million—could alone drive EPS to levels supporting a 15x multiple and 20%+ upside.
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Dolby targets a sharp fiscal Q4 rebound as content deals, auto Atmos growth and licensing gains face contract-timing volatility.
Dolby's discounted valuation and $756 million cash balance support its long-term case as premium formats and auto licensing expand.
DLB beat Q3 earnings estimates despite lower revenue, then forecast strong Q4 growth backed by video licensing, autos and new device categories.
Dolby Laboratories NYSE: DLB reported third-quarter fiscal 2026 revenue of $305 million, within its prior guidance range, as strength in Dolby Atmos, Dolby Vision and imaging patents was partly offset by deal timing and foundational audio revenue.
Dolby Laboratories (DLB) came out with quarterly earnings of $0.69 per share, beating the Zacks Consensus Estimate of $0.67 per share. This compares to earnings of $0.78 per share a year ago.
Although the revenue and EPS for Dolby Laboratories (DLB) give a sense of how its business performed in the quarter ended June 2026, it might be worth considering how some key metrics compare with Wall Street estimates and the year-ago numbers.
Dolby Laboratories, Inc. (DLB) Q3 2026 Earnings Call Transcript