Tigress Financial sets $112 target on Dolby stock with Buy rating

Published 15/05/2025, 15:36
Tigress Financial sets $112 target on Dolby stock with Buy rating

On Thursday, Tigress Financial Partners reinstated coverage on Dolby Laboratories (NYSE:DLB) shares with a Buy rating and set a price target of $112.00, representing a potential 46% upside from the current price of $76.85. According to InvestingPro data, the company maintains impressive gross profit margins of 88.92% and holds more cash than debt on its balance sheet. The firm highlighted Dolby’s advanced audio and video enhancement technologies as key drivers for the company’s potential growth in diverse markets such as in-vehicle and home infotainment systems, as well as the expanding realm of connected devices.

The analysts at Tigress Financial Partners believe that Dolby’s immersion technology is gaining traction across a wide array of devices and platforms, which is expected to spur business performance trends. The firm also emphasized the efficiency of Dolby’s licensing model, which they predict will contribute to increasing returns on capital and substantial growth in economic profit.

The coverage notes Dolby’s advantageous position to lead and benefit from the automotive industry’s rising demand for superior in-vehicle audio and entertainment experiences. With a multibillion-dollar market at stake, Dolby’s industry-leading immersive audio and video technology is seen as well-positioned to capitalize on these opportunities.

In addition to the automotive sector, Dolby Laboratories is expected to continue impacting the entertainment industry, both in theaters and in households. The integration of artificial intelligence across Dolby’s platforms, including Dolby OptiView for enhanced streaming and gaming experiences, is anticipated to further improve audio and video capabilities.

Tigress Financial Partners also pointed to Dolby’s robust financial health, noting its strong balance sheet and cash flow, which are expected to support ongoing product development and strategic acquisitions. InvestingPro analysis confirms this assessment, showing a healthy current ratio of 3.04 and minimal debt-to-equity ratio of 0.02. The company has maintained dividend payments for 12 consecutive years, with a current dividend yield of 1.72%. The firm also anticipates that Dolby will continue to enhance shareholder returns through periodic dividend increases and share repurchases. Consequently, Dolby Laboratories has been added to Tigress Financial Partners’ Research Focus List and included in their Focus Opportunity (SO:FTCE11B) Portfolio. For deeper insights into Dolby’s financial health and growth potential, InvestingPro subscribers can access comprehensive analysis, including 8 additional ProTips and detailed valuation metrics in our exclusive Pro Research Report, part of our coverage of 1,400+ US equities.

In other recent news, Dolby Laboratories reported its second-quarter earnings for 2025, exceeding expectations with a non-GAAP earnings per share of $1.34, surpassing the projected $1.27. However, the company’s revenue of $370 million fell short of the anticipated $376.38 million. Dolby adjusted its full-year revenue guidance to a range of $1.31 billion to $1.38 billion, reflecting cautious optimism amid ongoing macroeconomic uncertainties. The company forecasts third-quarter revenue between $290 million and $320 million, with a full-year EPS projection of $3.88 to $4.03. Dolby’s performance included a 1% year-over-year increase in revenue, with license revenue up 2% and product and services revenue down 10%. The company announced significant partnerships in the automotive sector, including collaborations with Porsche, Cadillac, Volvo (OTC:VLVLY), Xiaomi (OTC:XIACF), and Hyundai (OTC:HYMTF). Dolby’s CEO, Kevin Yeaman, emphasized the company’s preparedness to navigate varying market conditions, while CFO Robert Park highlighted Dolby’s strong financial fundamentals.

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