📊 AI Stock Rating — Summary

For the quarter ending September 2025, Dolby Laboratories (DLB) reported revenue of $307 million and net income of approximately $49 million, resulting in an EPS of $0.52. The company achieved a net margin of 16%, reflecting strong profitability. Free cash flow was robust at $168 million, indicating strong cash generation relative to revenue. Year-over-year revenue growth remains modest, but the company's strong balance sheet, featuring total equity of $2.63 billion and net debt of -$663 million (indicating more cash than debt), provides financial stability. Dolby's consistent dividend payouts, highlighted by a recent increase to $0.36 per share, complement their shareholder return strategy. Analysts have set price targets between $74 and $85, with a consensus target of $79.5, suggesting potential upside in the current valuation context.

AI Score Breakdown

Revenue Growth — Score: 6/10

Revenue growth is modest but stable, with a revenue figure of $307 million. The main driver appears to be consistent performance in the firm's core audio technologies.

Profitability — Score: 8/10

Dolby achieved a solid net margin of 16% with EPS of $0.52. This reflects efficient operations and strong cost management during the quarter.

Cash Flow Quality — Score: 9/10

The company demonstrates strong free cash flow generation of $168 million, with sustainable dividend payments and strategic stock repurchases indicating solid liquidity.

Leverage & Balance Sheet — Score: 9/10

Dolby maintains a strong balance sheet with negative net debt, highlighting exceptional financial resilience and substantial equity base.

Shareholder Returns — Score: 5/10

While the analysis period did not provide the explicit one-year price change, consistent dividends and buybacks enhance value, although shareholder returns appear moderate. If price appreciation was strong over the relevant periods, this would typically boost scores in this category.

Analyst Sentiment & Valuation — Score: 7/10

Valuation sees analyst targets up to $85, suggesting possible upside at the time of analysis. Further upside relies on consistent operational performance.

⚠ AI-generated — informational only, not financial advice.