Dolby Laboratories

DLB

Software - Application · Technology

Price

$65.27

+1.08 (+1.68%)

Market Cap

$6.21B

Winston Score

Winston is curious

Mixed quality — meaningful strengths and weaknesses.

Data as of Aug 23, 2026 · filings through Jun 26, 2026

How the score breaks down

Quality

Good

Growth

Weak

Cash Flow

Exceptional

Stability

Exceptional

Valuation

Strong

Dividends

Good

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Share count falling — buybacks

−6.8% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 104.6M (2021) → 97.5M (2025)

Winston Score History

The full picture

Dolby Laboratories makes audio and video technology that improves how sound and pictures look and feel in movies, music, and games. Its most well-known products are Dolby Atmos (surround sound) and Dolby Vision (high-quality picture), which are used by movie studios, streaming services like Netflix and Apple TV+, smartphone makers, and TV manufacturers. Dolby is one of the most recognized audio brands in the world and has been licensing its technology to Hollywood studios for decades.

Dolby makes most of its money by charging licensing fees when device makers — like Samsung or Sony — include Dolby technology in their products, such as TVs, phones, and laptops. The company operates globally, with a significant portion of revenue coming from Asia-Pacific markets where consumer electronics are manufactured. Its main competitive advantage is its deep library of patents and long-term contracts with major studios and hardware makers, though a key risk is that streaming platforms and device makers could develop competing audio and video standards of their own.

Politician Trades

2 trades / 12mo

1 Congressional buy and 1 sell on DLB in the last 12 months.

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Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

-3.3% YoY

YoY Growth Rate

Revenue declining

EPS Growth

-37.5% YoY

YoY Growth Rate

Earnings declining

R&D Spend

$262M/ year

→ Flat (-1% vs prior year)

19.4% of revenue

In line with sector average (15%)

Steady R&D investment year-over-year

Insider Activity

1.3%ownership

→ Flat

Insider ownership roughly steady over the past year

Cash Position

Cash flow positive

$756M cash & investments

Quarterly Free Cash Flow

↓ Burn rate worsening

Company generates more cash than it spends — no dilution risk from fundraising

Revenue declining

Dolby Laboratories's revenue is actually shrinking. In a growth stock, that removes the core investment thesis. The low Winston Score here may be warranted — unless there's a turnaround story.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

Each metric is explained in plain language so you know exactly what you're looking at. Start your free trial now.

Quality

Profit per sale

Gross Margin

86.8%

Premium pricing power — 86.8% gross margin

Profit after running costs

Operating Margin

11.3%

Modest — 11.3% operating margin

Return on the money invested

ROCE

9.2%

Below par — 9.2% return on capital

ROIC between 5% and 15%. They earn 5 to 15 cents back per year on every dollar invested.

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Growth

Sales growth

Sales YoY

+0.6%

Nearly flat sales (+0.6% YoY)

Profit growth

EPS YoY

-13.5%

Earnings shrinking (-13.5% YoY)

Earnings per share down more than 10%. Either a bad year, or a real decline.

How steady the profit is

EPS Consistency

4/8 quarters

Earnings inconsistent quarter-to-quarter

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Cash Flow

Profit that turns into cash

Cash Conversion

132%

Turns 132% of profit into real cash

Spare cash per sale

FCF Margin

19.1%

Converts sales into free cash efficiently (19.1%)

FCF margin between 10% and 20%. Every $100 in sales becomes $10 to $20 in real cash.

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Stability

What it owes vs what it owns

Debt / Equity

0.02

Conservative — low debt load (0.02)

Covers its interest

Interest Cover

31.87x

Comfortably covers interest (31.9x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

Price vs profit

P/E Ratio (TTM)

27.4x

Growth-priced — P/E 27.4

P/E above the market average. People are paying up for expected growth.

Cheaper or dearer next year

P/E vs Forward

+13.1

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (27.4 → 14.4)

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Dividends

Dividend

Dividend Yield

2.21%

Moderate income — 2.21% yield

Standard yield zone for stable dividend payers. A meaningful piece of total return.

Dividend record

Dividend Growth

+9.1%

Dividend growing modestly (9.1% YoY)

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