Dolby Laboratories (NYSE:DLB) Rating Lowered to Hold at Wall Street Zen

Key Points

• Wall Street Zen downgraded Dolby Laboratories to “Hold” from “Buy,” though the broader analyst consensus remains “Moderate Buy” with a $90.75 target price.
• Dolby’s quarterly EPS of $0.69 beat estimates of $0.67, but revenue fell 3.3% year over year to $305 million and missed expectations, reflecting weaker profitability and device sales.
• The company authorized a $350 million share-repurchase plan covering up to 7% of outstanding shares, signaling management’s belief that the stock may be undervalued.

Dolby Laboratories (NYSE:DLB - Get Free Report) was downgraded by investment analysts at Wall Street Zen from a "buy" rating to a "hold" rating in a research note issued to investors on Saturday.

Several other brokerages have also recently issued reports on DLB. Rosenblatt Securities reiterated a "buy" rating and set a $85.00 price target on shares of Dolby Laboratories in a research report on Friday. Weiss Ratings reaffirmed a "hold (c-)" rating on shares of Dolby Laboratories in a research report on Wednesday, June 24th. Finally, Barrington Research reaffirmed an "outperform" rating and set a $90.00 price objective on shares of Dolby Laboratories in a research report on Monday, June 15th. Three investment analysts have rated the stock with a Buy rating and two have issued a Hold rating to the stock. According to MarketBeat, the stock presently has a consensus rating of "Moderate Buy" and a consensus target price of $90.75.

Dolby Laboratories Stock Up 13.5%

NYSE:DLB opened at $58.78 on Friday. The stock has a market cap of $5.56 billion, a P/E ratio of 25.01 and a beta of 0.81. The firm's fifty day simple moving average is $52.29 and its 200 day simple moving average is $58.58. Dolby Laboratories has a twelve month low of $48.26 and a twelve month high of $75.80.

Dolby Laboratories (NYSE:DLB - Get Free Report) last issued its quarterly earnings data on Thursday, July 30th. The electronics maker reported $0.69 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $0.67 by $0.02. Dolby Laboratories had a net margin of 16.70% and a return on equity of 11.06%. The business had revenue of $305.00 million for the quarter, compared to the consensus estimate of $311.96 million. During the same period in the previous year, the firm earned $0.78 EPS. The company's quarterly revenue was down 3.3% compared to the same quarter last year. Dolby Laboratories has set its FY 2026 guidance at 4.250-4.400 EPS and its Q4 2026 guidance at 1.130-1.280 EPS. On average, analysts expect that Dolby Laboratories will post 3.21 EPS for the current fiscal year.

Dolby Laboratories declared that its Board of Directors has initiated a share repurchase plan on Thursday, July 30th that allows the company to buyback $350.00 million in shares. This buyback authorization allows the electronics maker to repurchase up to 7% of its shares through open market purchases. Shares buyback plans are generally an indication that the company's board of directors believes its stock is undervalued.

Insider Buying and Selling at Dolby Laboratories

In related news, SVP John D. Couling sold 7,667 shares of the business's stock in a transaction dated Wednesday, July 1st. The shares were sold at an average price of $53.20, for a total transaction of $407,884.40. Following the sale, the senior vice president owned 118,727 shares of the company's stock, valued at $6,316,276.40. The trade was a 6.07% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available at this link. Also, CMO Todd Pendleton sold 11,876 shares of the company's stock in a transaction dated Friday, May 22nd. The stock was sold at an average price of $54.55, for a total transaction of $647,835.80. Following the completion of the sale, the chief marketing officer owned 41,480 shares in the company, valued at approximately $2,262,734. This trade represents a 22.26% decrease in their position. The SEC filing for this sale provides additional information. Over the last three months, insiders sold 47,458 shares of company stock worth $2,639,537. Insiders own 37.93% of the company's stock.

Institutional Trading of Dolby Laboratories

Several hedge funds and other institutional investors have recently made changes to their positions in DLB. Boothbay Fund Management LLC grew its holdings in shares of Dolby Laboratories by 4.1% during the second quarter. Boothbay Fund Management LLC now owns 4,020 shares of the electronics maker's stock valued at $299,000 after buying an additional 157 shares during the last quarter. Covestor Ltd raised its stake in Dolby Laboratories by 6.0% in the 4th quarter. Covestor Ltd now owns 3,088 shares of the electronics maker's stock worth $198,000 after acquiring an additional 175 shares during the last quarter. Fifth Third Bancorp raised its stake in Dolby Laboratories by 34.7% in the 4th quarter. Fifth Third Bancorp now owns 746 shares of the electronics maker's stock worth $48,000 after acquiring an additional 192 shares during the last quarter. State of Michigan Retirement System lifted its position in Dolby Laboratories by 1.4% during the 1st quarter. State of Michigan Retirement System now owns 14,700 shares of the electronics maker's stock worth $883,000 after acquiring an additional 200 shares during the period. Finally, Raymond James Financial Inc. lifted its position in Dolby Laboratories by 1.0% during the 2nd quarter. Raymond James Financial Inc. now owns 24,344 shares of the electronics maker's stock worth $1,808,000 after acquiring an additional 235 shares during the period. Hedge funds and other institutional investors own 58.56% of the company's stock.

Dolby Laboratories News Roundup

Here are the key news stories impacting Dolby Laboratories this week:

• Positive Sentiment: Adjusted earnings beat expectations: Dolby reported fiscal third-quarter adjusted EPS of $0.69, above the $0.67 consensus estimate. Lower operating expenses helped offset weaker revenue. Dolby's Q3 Earnings Beat Estimates on Lower Operating Expenses
• Positive Sentiment: Upbeat forward outlook: Fiscal fourth-quarter revenue guidance of $362 million to $392 million exceeded the roughly $351 million analyst estimate, while full-year EPS guidance of $4.25 to $4.40 topped the $4.10 consensus. Management cited momentum in video licensing, automotive applications, and new device categories. Dolby Laboratories Reports Third Quarter 2026 Financial Results
• Positive Sentiment: $350 million stock-repurchase authorization: Dolby’s board approved a plan to repurchase up to 7% of outstanding shares, signaling management’s view that the stock may be undervalued and potentially supporting per-share results. Dolby Laboratories Share Repurchase Plan
• Positive Sentiment: Dividend and analyst support: Dolby declared a quarterly dividend of $0.36 per share, representing an approximate 2.5% annualized yield. Rosenblatt Securities reaffirmed its Buy rating and set an $85 price target, well above the recent trading level. Dolby Laboratories Dividend Signals Confidence
• Neutral Sentiment: Cash generation remained strong: Operating cash flow rose to $167.5 million, and Dolby ended the quarter with $669.4 million in cash, providing flexibility for buybacks, dividends, and investment.
• Negative Sentiment: Revenue and reported profitability declined: Third-quarter revenue fell 3.3% year over year to $305 million and missed estimates near $312 million. Reported net income and diluted GAAP EPS also declined from the prior year, reflecting softer device sales and continued pressure in some business areas. Dolby Laboratories Fiscal Q3 Adjusted Earnings, Revenue Fall

Dolby Laboratories Company Profile

Dolby Laboratories, Inc is a global leader in audio and imaging technologies, specializing in the development, licensing and deployment of solutions that enhance entertainment and communications experiences. The company's core business revolves around creating advanced audio codecs, noise reduction systems and spatial sound technologies for a wide range of applications, including cinema, broadcast, gaming, streaming and personal devices. Dolby's licensing model enables consumer electronics manufacturers, content creators and service providers to integrate its technologies into products such as televisions, smartphones, home theater systems and set-top boxes.

Among its flagship innovations are Dolby Atmos, an immersive audio format that delivers three-dimensional soundscapes for theaters and home systems; Dolby Digital and Dolby Digital Plus, widely adopted audio compression formats for broadcast and streaming; and Dolby Vision, a high-dynamic-range imaging technology that expands color, contrast and brightness in displays.

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