DLB - Dolby Laboratories Remains A Hold

2024-05-14 04:04:11 ET

Summary

• Dolby Laboratories reported second quarter results and while the bottom line could grow slightly, the top line declined a little bit.
• The company could grow by share buybacks, improving margins and, of course, top line growth, but more than mid-single digit growth seems unrealistic at this point.
• DLB stock is still a bit overvalued and not a great investment.

My last article about Dolby Laboratories, Inc. ( DLB ) was published eleven months ago – in June 2023. And the headline already summarized how I saw and still see Dolby Laboratories: A company with an economic moat but not really able to grow. Overall, I rated the stock as a “Hold” and in my conclusion I wrote:

Dolby Labs seems to have a wide economic moat around its business based on its patents and switching costs. However, the company seems not to be able to grow with a high pace in the last few years - despite the economic moat - and therefore the current stock price might not be justified.

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