Dolby Laboratories (DLB) Stock Forecast & Price Target

Dolby Laboratories Inc. reported total revenues of $307.0 million, reflecting a year-over-year increase of approximately 1%, which aligns with estimates. The company demonstrated improved operating margins, rising to 33.2% for the full year compared to 31.2% in the previous fiscal year, while total revenue for the year grew 5.9%, driven by a 5.6% increase in license revenue and a notable 10% rise in product and services revenue. With the ongoing adoption of its technologies and the expansion of the premium large format (PLF) cinema concept, Dolby is well-positioned for sustained growth, bolstered by strong demand for its Dolby Vision capture technology in key markets like China and India.

Dolby Laboratories is projecting a high-single-digit revenue decline for fiscal 2026, reflecting a continued trend similar to fiscal 2025, raising concerns about the company’s growth potential. Management's revised growth expectations for the Atmos/Vision/Patents business have also been lowered, now projected at 15% to 20%, down from a previous range of 15% to 25%. Additionally, gross margins experienced a slight decline from 90.1% to 89.7%, indicating potential challenges in maintaining profitability amidst a difficult macroeconomic environment and weakening foundational revenues linked to device volumes.