Dolby Laboratories, Inc. (DLB: 64.02 +0.55 +0.87%) recently hit a new multi-year high just above $69 as the company continues to expand into growing markets like iTunes, mobile handsets and Blu-ray DVD’s. Even though estimates are on the rise and the next-year estimate is projecting 15% earnings growth, the valuation picture is in line with its industry peers.Company Description
Dolby Laboratories, Inc. develops and delivers various audio technology products and services for both consumer and professional applications. The company was founded in 1965 in San Francisco and has a market cap of $7.33 billion.
Dolby is widely recognized as an industry leader in audio technology, a dynamic the company has been able to leverage to expand into growing markets like Blu-ray DVD’s and iTunes with an eye to penetrating the popular world of streaming content through providers like Netflix and RoxioNow. This dynamic and the company’s strong core business in home audio technology lifted it to better than expected Q1 results in late April that included a 21% earnings surprise.
Second-Quarter Results
Revenue for the period was up 19% from last year to $243 million. Earnings also came in strong at 74 cents, 21% ahead of the Zacks Consensus Estimate. Dolby has been solid over the last year, with an average earnings surprise of 26%.
CEO Kevin Yeaman touched on the company’s growing profile in popular consumer technologies, saying, “We continued to benefit from the inclusion of our technologies in many of the world’s most popular entertainment devices while making significant progress in our mobile initiative.”
Balance Sheet Looking Strong
Another Dolby strong point is the company’s balance sheet, where cash and equivalents are up $44 million from last year to $417 million against virtually no debt.
Estimates Jump
With Dolby raising guidance on the good quarter, analysts were quick to follow suit. The current year is up 21 cents in the last few months to $2.33, with the next-year estimate up 26 cents to $2.68, a bullish 15% growth projection.
ValuationAnd in spite of recent gains, the valuation picture looks reasonable, as shares trade with a forward P/E multiple of 30X, well below the industry average of 44X.
No comments:
Post a Comment