Barrington Research Maintains Outperform on Dolby Laboratories, Maintains $100 Price Target
5:14 PM ET Aug-09-2024
James Goss has given his Buy rating due to a combination of factors including Dolby Laboratories’ strategic growth initiatives and the potential stabilization of its core market. The company’s foundational technologies, while facing a challenging environment, appear to be stabilizing, and revenues from these technologies are expected to decline only in the low-to-mid-single digits. Additionally, Dolby’s growth sectors such as Atmos, Vision, and Imaging patents are anticipated to accelerate, having already increased their revenue share since the previous year. Goss’s optimism is further buoyed by the broad adoption of these technologies among content creators, which is likely to drive their inclusion on devices with larger volumes.
Moreover, James Goss underscores the expansion of Dolby’s technologies into new devices and markets, including smartphones and automobiles. The acquisition of a patent pool related to video compression and conferencing is viewed as a move that will contribute a stable revenue stream. Financially, Dolby’s recent quarterly results have been positive, with both revenue and earnings surpassing estimates. The reaffirmation of an Outperform rating and a $100 price target is supported by the company’s sound financial health, underscored by a conservative balance sheet and a robust cash position that enables ongoing stock repurchase programs and a reliable dividend yield. |
