Dolby Laboratories (NYSE:DLB) has experienced a notable decline in its stock price, reaching a new 52-week low of $63.16 during midday trading on Thursday. The stock closed slightly higher at $63.36, with a trading volume of 78,359 shares. This decline follows a series of analyst downgrades that have raised concerns about the company’s future performance.
Analyst Ratings Shift
Research analysts have recently reassessed their outlook on Dolby Laboratories. On November 19, Rosenblatt Securities lowered its price target from $95.00 to $85.00, maintaining a “buy” rating. Similarly, Barrington Research reduced its price target from $100.00 to $95.00, while also issuing an “outperform” rating. In contrast, Wall Street Zen upgraded Dolby from a “hold” to a “buy” rating on January 5. Overall, three analysts currently recommend buying the stock, and three suggest holding it. The consensus rating remains a “Moderate Buy,” with a target price of $92.00 according to data from MarketBeat.
Strong Earnings Report
Despite the recent stock decline, Dolby Laboratories reported strong quarterly earnings on November 18, exceeding analyst expectations. The company announced earnings per share (EPS) of $0.99, surpassing the consensus estimate of $0.70 by $0.29. Dolby’s revenue for the quarter was $307.02 million, slightly above the forecast of $305.76 million. The company’s net margin stood at 18.90%, while its return on equity was 11.99%. Year-over-year, revenue increased by 0.7%, marking a positive trend in performance.
Looking ahead, Dolby has set its fiscal year 2026 guidance at $4.190 to $4.340 EPS, with first-quarter guidance of $0.790 to $0.940 EPS. Analysts predict that Dolby will post an EPS of $2.94 for the current fiscal year.
Dividend Increase
Dolby Laboratories also announced an increase in its quarterly dividend. The company declared a dividend of $0.36 per share, which was paid on December 10 to shareholders of record as of December 2. This change represents an increase from the previous quarterly dividend of $0.33, yielding an annualized dividend of $1.44 and a dividend yield of 2.2%. The company’s current dividend payout ratio is 54.75%.
Insider Transactions and Institutional Holdings
Recent insider transactions have also caught attention. Mark Andrew Sherman, Executive Vice President, sold 9,109 shares on December 16 at an average price of $66.73, totaling approximately $607,843.57. Following this sale, he retains 73,054 shares in the company. Additionally, CEO Kevin J. Yeaman sold 36,699 shares on November 24 at an average price of $66.91, bringing in about $2,455,530.09. After this transaction, he still holds 114,725 shares. Over the past ninety days, insiders have sold a total of 162,120 shares, valued at approximately $10,906,559. Currently, insiders own 37.93% of the company’s stock.
Institutional investors have also adjusted their positions in Dolby Laboratories. Notably, First Horizon Corp acquired a new stake worth approximately $25,000 during the third quarter. Hantz Financial Services Inc. increased its stake by 166.7% in the same period. The firm now owns 352 shares, worth $25,000, after purchasing an additional 220 shares. Allworth Financial LP boosted its holdings by 590.4% during the second quarter, owning 504 shares valued at $37,000.
As of now, institutional investors and hedge funds hold 58.56% of Dolby Laboratories’ stock, reflecting significant confidence in the company’s long-term prospects.
Dolby Laboratories remains a leader in audio and imaging technologies, focusing on solutions that enhance entertainment and communication experiences globally. The company’s innovative products, including Dolby Atmos and Dolby Vision, continue to shape the market for cinema, broadcast, and personal devices. As shareholders assess the implications of recent stock movements and analyst ratings, the coming months will be crucial for Dolby’s market positioning.
