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%, and operating margins improved to 33.2%, up from 31.2% in the previous fiscal year. The growth trajectory is supported by an overall revenue increase of 5.9% year-over-year, driven by a 5.6% rise in licensing revenue and a 10% increase in product and service sales, indicating strong adoption of its technologies despite challenging macroeconomic conditions. Furthermore, the expansion of premium large format (PLF) concepts among exhibitors and the growing popularity of Dolby Vision technology in regions like China and India position the company for sustained long-term growth opportunities.

Dolby Laboratories Inc. has revised its growth outlook for its Atmos/Vision/Patents business to a range of 15% to 20%, reflecting a slight decline from the previous expectation of 15% to 25%. The company anticipates a high-single-digit revenue decline for fiscal 2026, consistent with a similar decline observed in fiscal 2025, amid continuing headwinds from reduced device volumes stemming from the post-pandemic market. Additionally, gross margins have contracted to 89.7% from 90.1% year-over-year, indicating pressures on profitability while foundational revenue, correlated with device volumes, is also expected to decrease by low-single digits.