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 282 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 has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year DLB was profitable.
DLB had a positive operating cash flow in the past year.
DLB had positive earnings in each of the past 5 years.
DLB had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 7.95%, DLB belongs to the top of the industry, outperforming 82.27% of the companies in the same industry.
With a decent Return On Equity value of 9.97%, DLB is doing good in the industry, outperforming 78.01% of the companies in the same industry.
DLB's Return On Invested Capital of 8.44% is amongst the best of the industry. DLB outperforms 83.33% of its industry peers.
The Average Return On Invested Capital over the past 3 years for DLB is below the industry average of 12.28%.
The 3 year average ROIC (8.02%) for DLB is below the current ROIC(8.44%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.95% | ||
| ROE | 9.97% | ||
| 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
DLB's Profit Margin of 19.44% is amongst the best of the industry. DLB outperforms 87.23% of its industry peers.
DLB's Profit Margin has been stable in the last couple of years.
The Operating Margin of DLB (21.44%) is better than 89.36% of its industry peers.
DLB's Operating Margin has declined in the last couple of years.
DLB has a better Gross Margin (88.92%) than 96.10% of its industry peers.
In the last couple of years the Gross Margin of DLB has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.44% | ||
| PM (TTM) | 19.44% | ||
| GM | 88.92% |
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
DLB has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
DLB has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, DLB has less shares outstanding
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
DLB has an Altman-Z score of 8.78. This indicates that DLB is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 8.78, DLB belongs to the top of the industry, outperforming 81.21% of the companies in the same industry.
There is no outstanding debt for DLB. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 8.78 |
ROIC/WACC0.77
WACC10.94%
2.3 Liquidity
DLB has a Current Ratio of 3.04. This indicates that DLB is financially healthy and has no problem in meeting its short term obligations.
DLB has a better Current ratio (3.04) than 78.01% of its industry peers.
A Quick Ratio of 2.96 indicates that DLB has no problem at all paying its short term obligations.
DLB has a Quick ratio of 2.96. This is in the better half of the industry: DLB outperforms 78.37% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.04 | ||
| Quick Ratio | 2.96 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 14.94% over the past year.
DLB shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 9.26% yearly.
The Revenue has been growing slightly by 4.03% in the past year.
The Revenue has been growing slightly by 0.51% on average over the past years.
EPS 1Y (TTM)14.94%
EPS 3Y1.08%
EPS 5Y9.26%
EPS Q2Q%5.51%
Revenue 1Y (TTM)4.03%
Revenue growth 3Y-0.2%
Revenue growth 5Y0.51%
Sales Q2Q%1.38%
3.2 Future
DLB is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.54% yearly.
DLB is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.92% yearly.
EPS Next Y5.52%
EPS Next 2Y5.74%
EPS Next 3Y6.54%
EPS Next 5YN/A
Revenue Next Year5.04%
Revenue Next 2Y4.84%
Revenue Next 3Y4.92%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 18.79, the valuation of DLB can be described as rather expensive.
DLB's Price/Earnings ratio is rather cheap when compared to the industry. DLB is cheaper than 81.91% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.30. DLB is valued slightly cheaper when compared to this.
The Price/Forward Earnings ratio is 17.69, which indicates a rather expensive current valuation of DLB.
Based on the Price/Forward Earnings ratio, DLB is valued cheaply inside the industry as 81.91% of the companies are valued more expensively.
DLB is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 21.76, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.79 | ||
| Fwd PE | 17.69 |
4.2 Price Multiples
DLB's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. DLB is cheaper than 83.33% of the companies in the same industry.
84.04% of the companies in the same industry are more expensive than DLB, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.5 | ||
| EV/EBITDA | 17.99 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates DLB does not grow enough to justify the current Price/Earnings ratio.
DLB has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)3.41
PEG (5Y)2.03
EPS Next 2Y5.74%
EPS Next 3Y6.54%
5. Dividend
5.1 Amount
DLB has a Yearly Dividend Yield of 1.74%. Purely for dividend investing, there may be better candidates out there.
DLB's Dividend Yield is rather good when compared to the industry average which is at 33.31. DLB pays more dividend than 95.74% of the companies in the same industry.
Compared to the average S&P500 Dividend Yield of 2.35, DLB is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.74% |
5.2 History
On average, the dividend of DLB grows each year by 9.47%, which is quite nice.
DLB has paid a dividend for at least 10 years, which is a reliable track record.
DLB has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)9.47%
Div Incr Years10
Div Non Decr Years10
5.3 Sustainability
47.03% 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.
DP47.03%
EPS Next 2Y5.74%
EPS Next 3Y6.54%
75.17
-0.51 (-0.67%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners95.73%
Inst Owner Change-0.02%
Ins Owners1.09%
Ins Owner Change0.13%
Market Cap7.22B
Analysts82.5
Price Target99.45 (32.3%)
Short Float %2.04%
Short Ratio3.18
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.74% |
Yearly Dividend1.2
Dividend Growth(5Y)9.47%
DP47.03%
Div Incr Years10
Div Non Decr Years10
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)5.95%
Min EPS beat(2)4.74%
Max EPS beat(2)7.16%
EPS beat(4)4
Avg EPS beat(4)11.54%
Min EPS beat(4)4.74%
Max EPS beat(4)19.15%
EPS beat(8)7
Avg EPS beat(8)11.13%
EPS beat(12)10
Avg EPS beat(12)13.43%
EPS beat(16)13
Avg EPS beat(16)13.56%
Revenue beat(2)1
Avg Revenue beat(2)-0.34%
Min Revenue beat(2)-2.79%
Max Revenue beat(2)2.11%
Revenue beat(4)1
Avg Revenue beat(4)-0.69%
Min Revenue beat(4)-2.79%
Max Revenue beat(4)2.11%
Revenue beat(8)2
Avg Revenue beat(8)-0.68%
Revenue beat(12)4
Avg Revenue beat(12)-0.26%
Revenue beat(16)5
Avg Revenue beat(16)-0.72%
PT rev (1m)0%
PT rev (3m)-2.5%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-10.08%
EPS NY rev (1m)0%
EPS NY rev (3m)-2.46%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.13%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.09%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.79 | ||
| Fwd PE | 17.69 | ||
| P/S | 5.47 | ||
| P/FCF | 18.5 | ||
| P/OCF | 17.23 | ||
| P/B | 2.81 | ||
| P/tB | 4.41 | ||
| EV/EBITDA | 17.99 |
EPS(TTM)4
EY5.32%
EPS(NY)4.25
Fwd EY5.65%
FCF(TTM)4.06
FCFY5.41%
OCF(TTM)4.36
OCFY5.8%
SpS13.74
BVpS26.79
TBVpS17.04
PEG (NY)3.41
PEG (5Y)2.03
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.95% | ||
| ROE | 9.97% | ||
| ROCE | 10.21% | ||
| ROIC | 8.44% | ||
| ROICexc | 10.9% | ||
| ROICexgc | 19.36% | ||
| OM | 21.44% | ||
| PM (TTM) | 19.44% | ||
| GM | 88.92% | ||
| FCFM | 29.57% |
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 Turnover0.41
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 34.31% | ||
| Cap/Sales | 2.17% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 114.34% | ||
| Profit Quality | 152.14% | ||
| Current Ratio | 3.04 | ||
| Quick Ratio | 2.96 | ||
| Altman-Z | 8.78 |
F-Score7
WACC10.94%
ROIC/WACC0.77
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)14.94%
EPS 3Y1.08%
EPS 5Y9.26%
EPS Q2Q%5.51%
EPS Next Y5.52%
EPS Next 2Y5.74%
EPS Next 3Y6.54%
EPS Next 5YN/A
Revenue 1Y (TTM)4.03%
Revenue growth 3Y-0.2%
Revenue growth 5Y0.51%
Sales Q2Q%1.38%
Revenue Next Year5.04%
Revenue Next 2Y4.84%
Revenue Next 3Y4.92%
Revenue Next 5YN/A
EBIT growth 1Y18.66%
EBIT growth 3Y-8.08%
EBIT growth 5Y-2.06%
EBIT Next Year27.7%
EBIT Next 3Y13.2%
EBIT Next 5YN/A
FCF growth 1Y12.13%
FCF growth 3Y-8.91%
FCF growth 5Y6.77%
OCF growth 1Y8.92%
OCF growth 3Y-9.93%
OCF growth 5Y-0.03%