Research Alert: CFRA Reiterates Hold Rating On Shares Of Dolby Laboratories, Inc.
We raise our 12-month target to $87 from $84 on a P/E of 23.5x using our FY 24 EPS view, below its three-year average on headwinds to licensing revenue. We trim our FY 24 EPS projection to $3.68 from $3.89 and start FY 25's EPS forecast at $4.00. DLB posted Q4 revenue of $290.6M, above consensus by $0.4M, while non-GAAP EPS of $0.65 beat by $0.12. Revenue increased 4.4% Y/Y from stronger performance in Mobile (+4.6% Y/Y) and Consumer Electronics (+15.5% Y/Y) during the quarter, while Broadcast and PC remained sluggish, declining by 5.7% Y/Y and 14.7% Y/Y, respectively. Lower shipments for its foundational technologies continued to be the primary drag on revenue in these categories, even as Dolby Atmos, Dolby Vision, and its imaging patents (about a third of licensing revenues) are growing at double-digit rates (20% Y/Y for the full year). Macro headwinds remained persistent, however, as new partnerships and design wins are extending decision timelines and are expected to be a drag on top-line growth in FY 24. |
