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Category: Stock Market and Dolby Laboratories
Date: 19 November 2019 Stock Price: $69.25 We take a look at the 4th quarter 2019 earnings report of Dolby a provider of audio-visual services and equipment.
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About Dolby Laboratories
Dolby Laboratories (NYSE:DLB) is based in San Francisco with offices in over 20 countries around the globe. Dolby transforms the science of sight and sound into spectacular experiences. Through innovative research and engineering, we create breakthrough experiences for billions of people worldwide through a collaborative ecosystem spanning artists, businesses, and consumers. The experiences people have - with Dolby Cinema, Dolby Vision, Dolby Atmos, Dolby Audio, Dolby Dimension, and Dolby Voice - revolutionize entertainment and communications at the cinema, on the go, in the home, and at work.
Dolby Surround Sound System. Image obtained from Tailormadeav.com
Financial overview of Dolby Laboratories' 4th quarter 2019 earnings report
The data below refers to the latest quarter unless specified otherwise
- Revenues: $298.827 million (up from $240.571 million for the same quarter of the previous year)
- Revenues increased by 24.2% over the last 12 months
- Total operating expenses: $201.647 million (up from $196.758 million for the same quarter of the previous year)
- Total operating expenses increased by 2.5% over the last 12 months.
- Net income: $43.918 million (up from $26.716 million for the same quarter of the previous year)
- Diluted income per share: $0.43 (up from $0.25 for the same quarter of the previous year)
- PE ratio of Dolby Laboratories: 28.4
- Dividend declared: $0.22
- Dividend yield of Dolby Laboratories: 1.3%
- Diluted weighted number of shares outstanding: 102.945 million (down from 106.794 million for the same quarter of the previous year)
- Cash and cash equivalents: $797.212 million
- Cash and cash equivalents per share: $7.74
- Cash and cash equivalents makes up 11.2% of Dolby's market capital
- Cash and cash equivalents makes up 28.3% of Dolby's total assets
- Receivables, net: $189.115 million
- Receivables makes up 6.7% of Dolby's total assets
- Stockholders equity in Dolby Laboratories: $2.313 billion
- Stockholders equity per share in Dolby: $22.46
- Dolby Laboratories is trading at 3.08 times its stockholders equity which is within the expected range of between 2 and 4 times that most firms tend to trade at
- Cash generated from operations (for the full fiscal 2019): $327.674 million
- Cash generated from operations per share (for the full fiscal 2019): $3.18
Dolby Laboratories (NYSE: DLB) management commentary on their 4th quarter 2019 earnings
SAN FRANCISCO, Nov. 14, 2019 (GLOBE NEWSWIRE) -- Dolby Laboratories, Inc. (NYSE:DLB) today announced the Company's financial results for the fourth quarter and fiscal year that ended September 27, 2019. For the fourth quarter, Dolby reported total revenue of $298.8 million, compared to $240.6 million for the fourth quarter of fiscal 2018. For fiscal 2019, Dolby reported total revenue of $1.24 billion, compared to $1.05 billion for fiscal 2018. “We achieved solid financial performance in 2019 and continued to build momentum for the combined Dolby Vision and Dolby Atmos experience, highlighted by new offerings from Apple and Disney,” said Kevin Yeaman, President and CEO, Dolby Laboratories. “We also introduced Dolby Atmos music, a completely new way for artists to create and fans to experience music, which is now available on Amazon Echo Studio and Amazon Music HD.”
Dividend
Today, Dolby announced a cash dividend of $0.22 per share of Class A and Class B common stock, payable on December 4, 2019, to stockholders of record as of the close of business on November 26, 2019.
Financial Outlook First Quarter Fiscal 2020
Dolby is providing the following estimates for its first quarter of fiscal 2020:
Fiscal Year 2020
Dolby is providing the following estimates for its fiscal year 2020:
Today, Dolby announced a cash dividend of $0.22 per share of Class A and Class B common stock, payable on December 4, 2019, to stockholders of record as of the close of business on November 26, 2019.
Financial Outlook First Quarter Fiscal 2020
Dolby is providing the following estimates for its first quarter of fiscal 2020:
- Total revenue will range from $275 million to $295 million
- Gross margin percentages will be approximately 88% on a GAAP basis and approximately 89% on a non-GAAP basis
- Operating expenses will range from $214 million to $220 million on a GAAP basis and from $192 million to $198 million on a non-GAAP basis
- Effective tax rate will range from 18% to 21% on both a GAAP basis and non-GAAP basis
- Diluted earnings per share will range from $0.27 to $0.33 on a GAAP basis and from $0.45 to $0.51 on a non-GAAP basis
Fiscal Year 2020
Dolby is providing the following estimates for its fiscal year 2020:
- Total revenue will range from $1.30 billion to $1.35 billion
- Gross margin percentages will range from 87% to 88% on a GAAP basis and from 88% to 89% on a non-GAAP basis
- Operating expenses will range from $829 million to $849 million on a GAAP basis and from $740 million to $760 million on a non-GAAP basis
- Effective tax rate will range from 18% to 21% on both a GAAP basis and non-GAAP basis
- Diluted earnings per share will range from $2.64 to $2.74 on a GAAP basis and from $3.40 to $3.50 on a non-GAAP basis
Dolby Laboratories (NYSE: DLB) stock price history
The image below obtained from Google, shows the stock price history of Dolby Laboratories (NYSE: DLB) for the last 5 years. Its been a decent time for Dolby stockholders over the last 5 years. 5 years ago the stock of Dolby was trading at $43.50 and its currently trading at $69.25 a stock. That's a return of 59.2% provided to Dolby stockholders over the last 5 years.
Dolby's stock is trading at a lot closer to its 52 week high of $71.77 than it is to its 52 week low of $56.09 which to us is a clear indication that the short term sentiment and momentum of Dolby 's stock is very positive.
Dolby's stock is trading at a lot closer to its 52 week high of $71.77 than it is to its 52 week low of $56.09 which to us is a clear indication that the short term sentiment and momentum of Dolby 's stock is very positive.
Dolby Laboratories (NYSE:DLB) stock price history over the last 5 years
Recent coverage of Dolby
The extract below covers the latest regarding Dolby as obtained from theStreet.com
SAN FRANCISCO, Sept. 25, 2019 (GLOBE NEWSWIRE) -- Dolby Laboratories, Inc. (NYSE: DLB), the leader in immersive audio and video entertainment, is introducing a more emotional way to experience the music you love with Dolby Atmos , now supported on Echo Studio and Amazon Music HD. Dolby Atmos is redefining how music is experienced by giving artists a platform that removes the limitations of creation and allows listeners to experience a deeper connection with their favorite artists and songs. Listening to music in Dolby Atmos on Echo Studio will unleash every detail as it was meant to be heard, completely immersing fans in a whole new way. "Dolby Atmos music is a new experience for artists and fans. It opens a new creative palette for musicians to experiment and express themselves with their recordings,"
SAN FRANCISCO, Sept. 25, 2019 (GLOBE NEWSWIRE) -- Dolby Laboratories, Inc. (NYSE: DLB), the leader in immersive audio and video entertainment, is introducing a more emotional way to experience the music you love with Dolby Atmos , now supported on Echo Studio and Amazon Music HD. Dolby Atmos is redefining how music is experienced by giving artists a platform that removes the limitations of creation and allows listeners to experience a deeper connection with their favorite artists and songs. Listening to music in Dolby Atmos on Echo Studio will unleash every detail as it was meant to be heard, completely immersing fans in a whole new way. "Dolby Atmos music is a new experience for artists and fans. It opens a new creative palette for musicians to experiment and express themselves with their recordings,"
Dolby portable music speaker
Dolby Laboratories (NYSE: DLB) stock valuation
So what do we value the stock of Dolby Laboratories at after their latest earnings report and their fiscal guidance provided? Based on their 4th quarter and full fiscal 2019 earnings report and their earnings guidance provided for their 2020 fiscal year our valuation model provides a target (full value) price for Dolby at $59.50 a stock.
We therefore believe the stock of Dolby is overvalued at its current price. We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target (full value) price which in this case is $59.50. A good entry point into Dolby Laboratories stock would therefore be at $53.60 or below.
We expect the stock of Dolby to pull back from current levels to levels closer to our target (full value) price in coming weeks and months. Since the stock of Dolby Laboratories is trading at well above our suggested target price and entry point into the stock we rate that stock of Dolby as a sell
We therefore believe the stock of Dolby is overvalued at its current price. We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target (full value) price which in this case is $59.50. A good entry point into Dolby Laboratories stock would therefore be at $53.60 or below.
We expect the stock of Dolby to pull back from current levels to levels closer to our target (full value) price in coming weeks and months. Since the stock of Dolby Laboratories is trading at well above our suggested target price and entry point into the stock we rate that stock of Dolby as a sell
Next earnings release of Dolby
It is expected that Dolby Laboratories will release their 1st quarter 2020 earnings report in mid February 2020