DOLBY LABORATORIES INC-CL A (DLB) Stock Fundamental Analysis
NYSE:DLB - New York Stock Exchange, Inc. - US25659T1079 - Common Stock - Currency: USD
We assign a fundamental rating of 7 out of 10 to DLB. DLB was compared to 283 industry peers in the Software industry. DLB has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. DLB is not valued too expensively and it also shows a decent growth rate. These ratings could make DLB a good candidate for quality investing.
1. Profitability
1.1 Basic Checks
DLB had positive earnings in the past year.
DLB had a positive operating cash flow in the past year.
Each year in the past 5 years DLB has been profitable.
In the past 5 years DLB always reported a positive cash flow from operatings.
1.2 Ratios
DLB has a Return On Assets of 8.32%. This is amongst the best in the industry. DLB outperforms 84.73% of its industry peers.
With an excellent Return On Equity value of 10.47%, DLB belongs to the best of the industry, outperforming 80.73% of the companies in the same industry.
With an excellent Return On Invested Capital value of 8.44%, DLB belongs to the best of the industry, outperforming 81.82% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for DLB is below the industry average of 11.63%.
The last Return On Invested Capital (8.44%) for DLB is above the 3 year average (8.02%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.32% | ||
| ROE | 10.47% | ||
| ROIC | 8.44% |
ROA(3y)7.33%
ROA(5y)7.98%
ROE(3y)9.1%
ROE(5y)9.75%
ROIC(3y)8.02%
ROIC(5y)8.2%
1.3 Margins
With an excellent Profit Margin value of 19.97%, DLB belongs to the best of the industry, outperforming 86.18% of the companies in the same industry.
DLB's Profit Margin has been stable in the last couple of years.
The Operating Margin of DLB (21.10%) is better than 89.09% of its industry peers.
DLB's Operating Margin has declined in the last couple of years.
The Gross Margin of DLB (88.65%) is better than 93.82% of its industry peers.
DLB's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.1% | ||
| PM (TTM) | 19.97% | ||
| GM | 88.65% |
OM growth 3Y-7.9%
OM growth 5Y-2.56%
PM growth 3Y-5.31%
PM growth 5Y0%
GM growth 3Y-0.33%
GM growth 5Y0.44%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), DLB is destroying value.
Compared to 1 year ago, DLB has less shares outstanding
The number of shares outstanding for DLB has been reduced compared to 5 years ago.
DLB has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
An Altman-Z score of 9.41 indicates that DLB is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 9.41, DLB belongs to the top of the industry, outperforming 81.45% of the companies in the same industry.
DLB has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 9.41 |
ROIC/WACC0.61
WACC13.92%
2.3 Liquidity
DLB has a Current Ratio of 2.91. This indicates that DLB is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of DLB (2.91) is better than 74.18% of its industry peers.
DLB has a Quick Ratio of 2.84. This indicates that DLB is financially healthy and has no problem in meeting its short term obligations.
DLB has a Quick ratio of 2.84. This is in the better half of the industry: DLB outperforms 74.55% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.91 | ||
| Quick Ratio | 2.84 |
3. Growth
3.1 Past
DLB shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 13.26%, which is quite good.
DLB shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 9.26% yearly.
Looking at the last year, DLB shows a small growth in Revenue. The Revenue has grown by 2.71% in the last year.
DLB shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 0.51% yearly.
EPS 1Y (TTM)13.26%
EPS 3Y1.08%
EPS 5Y9.26%
EPS Q2Q%12.87%
Revenue 1Y (TTM)2.71%
Revenue growth 3Y-0.2%
Revenue growth 5Y0.51%
Sales Q2Q%13.13%
3.2 Future
Based on estimates for the next years, DLB will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.13% on average per year.
Based on estimates for the next years, DLB will show a small growth in Revenue. The Revenue will grow by 6.06% on average per year.
EPS Next Y8.18%
EPS Next 2Y7.94%
EPS Next 3Y9.13%
EPS Next 5YN/A
Revenue Next Year6.2%
Revenue Next 2Y5.84%
Revenue Next 3Y6.06%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 20.58 indicates a rather expensive valuation of DLB.
Based on the Price/Earnings ratio, DLB is valued cheaper than 80.73% of the companies in the same industry.
When comparing the Price/Earnings ratio of DLB to the average of the S&P500 Index (29.98), we can say DLB is valued slightly cheaper.
A Price/Forward Earnings ratio of 18.27 indicates a rather expensive valuation of DLB.
82.18% of the companies in the same industry are more expensive than DLB, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 22.66. DLB is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.58 | ||
| Fwd PE | 18.27 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of DLB indicates a rather cheap valuation: DLB is cheaper than 81.09% of the companies listed in the same industry.
DLB's Price/Free Cash Flow ratio is rather cheap when compared to the industry. DLB is cheaper than 83.64% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.74 | ||
| EV/EBITDA | 20.54 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
DLB has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.52
PEG (5Y)2.22
EPS Next 2Y7.94%
EPS Next 3Y9.13%
5. Dividend
5.1 Amount
DLB has a Yearly Dividend Yield of 1.63%.
Compared to an average industry Dividend Yield of 12.93, DLB pays a better dividend. On top of this DLB pays more dividend than 94.18% of the companies listed in the same industry.
Compared to the average S&P500 Dividend Yield of 2.30, DLB is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.63% |
5.2 History
The dividend of DLB is nicely growing with an annual growth rate of 9.47%!
DLB has been paying a dividend for at least 10 years, so it has a reliable track record.
As DLB did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)9.47%
Div Incr Years9
Div Non Decr Years9
5.3 Sustainability
44.76% of the earnings are spent on dividend by DLB. This is a bit on the high side, but may be sustainable.
The dividend of DLB is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP44.76%
EPS Next 2Y7.94%
EPS Next 3Y9.13%
80.88
-0.73 (-0.89%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners92.74%
Inst Owner Change0.8%
Ins Owners1.12%
Ins Owner Change8.42%
Market Cap7.80B
Analysts82.5
Price Target102 (26.11%)
Short Float %1.21%
Short Ratio1.52
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.63% |
Yearly Dividend1.2
Dividend Growth(5Y)9.47%
DP44.76%
Div Incr Years9
Div Non Decr Years9
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)11.14%
Min EPS beat(2)7.16%
Max EPS beat(2)15.12%
EPS beat(4)4
Avg EPS beat(4)11.7%
Min EPS beat(4)5.37%
Max EPS beat(4)19.15%
EPS beat(8)7
Avg EPS beat(8)14.03%
EPS beat(12)10
Avg EPS beat(12)14%
EPS beat(16)13
Avg EPS beat(16)15.46%
Revenue beat(2)1
Avg Revenue beat(2)0.06%
Min Revenue beat(2)-2%
Max Revenue beat(2)2.11%
Revenue beat(4)2
Avg Revenue beat(4)0.11%
Min Revenue beat(4)-2%
Max Revenue beat(4)2.11%
Revenue beat(8)3
Avg Revenue beat(8)0.47%
Revenue beat(12)4
Avg Revenue beat(12)-0.06%
Revenue beat(16)6
Avg Revenue beat(16)-0.07%
PT rev (1m)0%
PT rev (3m)1.01%
EPS NQ rev (1m)-6.4%
EPS NQ rev (3m)-6.4%
EPS NY rev (1m)0.25%
EPS NY rev (3m)0.25%
Revenue NQ rev (1m)-2.79%
Revenue NQ rev (3m)-2.79%
Revenue NY rev (1m)0.07%
Revenue NY rev (3m)0.07%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.58 | ||
| Fwd PE | 18.27 | ||
| P/S | 5.93 | ||
| P/FCF | 19.74 | ||
| P/OCF | 18.31 | ||
| P/B | 3.11 | ||
| P/tB | 4.98 | ||
| EV/EBITDA | 20.54 |
EPS(TTM)3.93
EY4.86%
EPS(NY)4.43
Fwd EY5.47%
FCF(TTM)4.1
FCFY5.07%
OCF(TTM)4.42
OCFY5.46%
SpS13.65
BVpS26.02
TBVpS16.25
PEG (NY)2.52
PEG (5Y)2.22
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.32% | ||
| ROE | 10.47% | ||
| ROCE | 10.21% | ||
| ROIC | 8.44% | ||
| ROICexc | 10.44% | ||
| ROICexgc | 18.28% | ||
| OM | 21.1% | ||
| PM (TTM) | 19.97% | ||
| GM | 88.65% | ||
| FCFM | 30.03% |
ROA(3y)7.33%
ROA(5y)7.98%
ROE(3y)9.1%
ROE(5y)9.75%
ROIC(3y)8.02%
ROIC(5y)8.2%
ROICexc(3y)11.36%
ROICexc(5y)12.88%
ROICexgc(3y)17.78%
ROICexgc(5y)19.47%
ROCE(3y)9.71%
ROCE(5y)9.93%
ROICexcg growth 3Y-12.75%
ROICexcg growth 5Y-4.71%
ROICexc growth 3Y-18.76%
ROICexc growth 5Y-8.2%
OM growth 3Y-7.9%
OM growth 5Y-2.56%
PM growth 3Y-5.31%
PM growth 5Y0%
GM growth 3Y-0.33%
GM growth 5Y0.44%
F-Score7
Asset Turnover0.42
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 38.34% | ||
| Cap/Sales | 2.33% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 119.04% | ||
| Profit Quality | 150.36% | ||
| Current Ratio | 2.91 | ||
| Quick Ratio | 2.84 | ||
| Altman-Z | 9.41 |
F-Score7
WACC13.92%
ROIC/WACC0.61
Cap/Depr(3y)47.88%
Cap/Depr(5y)55.27%
Cap/Sales(3y)3.14%
Cap/Sales(5y)3.93%
Profit Quality(3y)140.69%
Profit Quality(5y)133.53%
High Growth Momentum
Growth
EPS 1Y (TTM)13.26%
EPS 3Y1.08%
EPS 5Y9.26%
EPS Q2Q%12.87%
EPS Next Y8.18%
EPS Next 2Y7.94%
EPS Next 3Y9.13%
EPS Next 5YN/A
Revenue 1Y (TTM)2.71%
Revenue growth 3Y-0.2%
Revenue growth 5Y0.51%
Sales Q2Q%13.13%
Revenue Next Year6.2%
Revenue Next 2Y5.84%
Revenue Next 3Y6.06%
Revenue Next 5YN/A
EBIT growth 1Y15.04%
EBIT growth 3Y-8.08%
EBIT growth 5Y-2.06%
EBIT Next Year32.55%
EBIT Next 3Y15.82%
EBIT Next 5YN/A
FCF growth 1Y30.56%
FCF growth 3Y-8.91%
FCF growth 5Y6.77%
OCF growth 1Y23.98%
OCF growth 3Y-9.93%
OCF growth 5Y-0.03%