Dolby Laboratories, Inc.
Dolby Laboratories, Inc. Fundamental Analysis
Dolby Laboratories, Inc. (DLB) shows moderate financial fundamentals with a PE ratio of 25.38, profit margin of 17.97%, and ROE of 9.26%. The company generates $1.3B in annual revenue with moderate year-over-year growth of 5.92%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 64.5/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze DLB's fundamental strength across five key dimensions:
Efficiency Score
WeakDLB struggles to generate sufficient returns from assets.
Valuation Score
ModerateDLB shows balanced valuation metrics.
Growth Score
ModerateDLB shows steady but slowing expansion.
Financial Health Score
ExcellentDLB maintains a strong and stable balance sheet.
Profitability Score
ModerateDLB maintains healthy but balanced margins.
Key Financial Metrics
Is DLB Expensive or Cheap?
P/E Ratio
DLB trades at 25.38 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, DLB's PEG of -4.50 indicates potential undervaluation.
Price to Book
The market values Dolby Laboratories, Inc. at 2.35 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 17.76 times EBITDA. This signals the market has high growth expectations.
How Well Does DLB Make Money?
Net Profit Margin
For every $100 in sales, Dolby Laboratories, Inc. keeps $17.97 as profit after all expenses.
Operating Margin
Core operations generate 18.78 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $9.26 in profit for every $100 of shareholder equity.
ROA
Dolby Laboratories, Inc. generates $7.53 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Dolby Laboratories, Inc. generates strong operating cash flow of $421.82M, reflecting robust business health.
Free Cash Flow
Dolby Laboratories, Inc. generates strong free cash flow of $381.12M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $3.98 in free cash annually.
FCF Yield
DLB converts 6.20% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
25.38
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-4.50
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.35
vs 25 benchmark
P/S Ratio
Price to sales ratio
4.58
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.02
vs 25 benchmark
Current Ratio
Current assets to current liabilities
3.17
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.09
vs 25 benchmark
ROA
Return on assets percentage
0.08
vs 25 benchmark
ROCE
Return on capital employed
0.09
vs 25 benchmark
How DLB Stacks Against Its Sector Peers
| Metric | DLB Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 25.38 | 35.19 | Better (Cheaper) |
| ROE | 9.26% | 1155.00% | Weak |
| Net Margin | 17.97% | -127067.00% (disorted) | Strong |
| Debt/Equity | 0.02 | 0.41 | Strong (Low Leverage) |
| Current Ratio | 3.17 | 4.71 | Strong Liquidity |
| ROA | 7.53% | -314918.00% (disorted) | Weak |
DLB outperforms its industry in 4 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Dolby Laboratories, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
21.81%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
15.62%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
44.05%
Industry Style: Growth, Innovation, High Beta
High Growth