Why Is Dolby Laboratories (DLB) Up 3.3% Since Last Earnings Report?

A month has gone by since the last earnings report for Dolby Laboratories (DLB). Shares have added about 3.3% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Dolby Laboratories due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent drivers for Dolby Laboratories before we dive into how investors and analysts have reacted as of late.Dolby's Q4 Earnings Surpass EstimatesDolby reported fourth-quarter fiscal 2025 non-GAAP earnings per share (EPS) of 99 cents, surpassing the Zacks Consensus Estimate of 70 cents. It reported 81 cents in the prior-year quarter.Total revenues were $307 million, up from $304.8 million in the year-ago quarter and surpassed the Zacks Consensus Estimate by 0.5%. This uptick was driven by higher revenues in the Product and Services segment.The company closed fiscal 2025 on a strong note, with growth in Dolby Atmos, Dolby Vision and its imaging patents, while also broadening its addressable market through the continued momentum of Dolby OptiView and the launch of a new imaging patent pool for content streaming.For fiscal 2026, management is confident in its strategy to drive business growth by delivering meaningful value across both existing and emerging ecosystems of creators, content distributors and device manufacturers.Segmental PerformanceRevenues from Licensing were $281.6 million, down 0.4% year over year. Licensing revenue was in line with the company’s guidance of $263 million to $293 million.Products and Services’ revenues were up 14.9% year over year to $25.4 million.Our estimates were pegged at $281 million and $24.5 million for the Licensing and Products and Services revenues, respectively.Broadcast Licensing contributed 38% to total licensing revenues in the quarter under review. Mobile Licensing, Consumer Electronics (CE), PC Licensing and Licensing from Other Markets accounted for 18%, 12%, 10% and 22% of licensing revenues, respectively.Other DetailsGross profit in the fiscal fourth quarter was $267.5 million compared with $270.8 million in the year-ago quarter. Total operating expenses increased to $237.8 million from $224.5 million reported in the year-ago quarter.Operating income was $29.7 million compared with $46.4 million in the year-ago quarter.Cash Flow & LiquidityFor the fiscal year ended on Sept. 26, 2025, Dolby generated $472.2 million of net cash from operating activities.As of Sept. 26, 2025, the company had $701.9 million in cash and cash equivalents, with $595.8 million in total liabilities. It had $698.6 million in cash and cash equivalents, with $581.8 million in total liabilities, as of June 27, 2025.The company repurchased approximately 479,000 shares of its common stock for about $35 million during the quarter and ended the quarter with roughly $277 million remaining under its stock repurchase authorization.The company declared a cash dividend of 36 cents per share, payable on Dec. 10, 2025, to shareholders on record as of the close of business on Dec. 2, 2025.2026 OutlookFor the first quarter of fiscal 2026, the company estimates revenues between $315 million and $345 million. First-quarter revenue is projected to decline about 8% year over year at the midpoint, mainly because of a tough comparison with last year’s sizable true-up and the timing of recoveries and minimum volume commitments.The company anticipates first-quarter licensing revenues to be between $290 million and $320 million.On a GAAP basis, operating expenses are expected to be in the range of $235-$245 million. On a non-GAAP basis, the same is anticipated to be between $195 million and $205 million.It expects GAAP EPS of 28-43 cents and non-GAAP EPS between 39 cents and 54 cents.For fiscal 2026, the company expects revenues to be in the $1.39-$1.44 billion band. The company reported revenues of $1.35 billion in fiscal 2025.Licensing revenues are projected to range from $1.285 billion to $1.335 billion, with revenue from Foundational Audio Technologies expected to decline in the low single digits due to deal timing in Mobile and lower anticipated unit shipments in PC and CE. By end market, the company expects full-year revenue to grow at a high-teens rate in Other, rise mid-single digits in Broadcast and Mobile and decline by high single digits in CE and PC.GAAP operating margin is expected to be 21%, while the non-GAAP operating margin is projected to be nearly 34%.On a GAAP basis, operating expenses are expected to range from $930 million to $950 million. On a non-GAAP basis, it is anticipated to range from $780 million to $800 million.The company expects GAAP EPS of $2.61 to $2.76, and non-GAAP EPS is anticipated to be $4.19-$4.34. Dolby reported non-GAAP EPS of $4.24 in fiscal 2025.How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a downward trend in fresh estimates.The consensus estimate has shifted -23.24% due to these changes.VGM ScoresCurrently, Dolby Laboratories has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Following the exact same course, the stock was allocated a score of C on the value side, putting it in the middle 20% for this investment strategy.Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Dolby Laboratories has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.Performance of an Industry PlayerDolby Laboratories is part of the Zacks Audio Video Production industry. Over the past month, Sonos (SONO), a stock from the same industry, has gained 12.6%. The company reported its results for the quarter ended September 2025 more than a month ago.Sonos reported revenues of $287.9 million in the last reported quarter, representing a year-over-year change of +12.7%. EPS of -$0.06 for the same period compares with -$0.18 a year ago.For the current quarter, Sonos is expected to post earnings of $0.85 per share, indicating a change of +32.8% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Sonos. Also, the stock has a VGM Score of B.Zacks Naming Top 10 Stocks for 2026Want to be tipped off early to our 10 top picks for the entirety of 2026? History suggests their performance could be sensational.From 2012 (when our Director of Research Sheraz Mian assumed responsibility for the portfolio) through November, 2025, the Zacks Top 10 Stocks gained +2,530.8%, more than QUADRUPLING the S&P 500’s +570.3%.Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2026. Don’t miss your chance to get in on these stocks when they’re released on January 5. Be First to New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Dolby Laboratories (DLB): Free Stock Analysis Report Sonos, Inc. (SONO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks