Dolby Labs Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of audio technologist Dolby Laboratories (NYSE: DLB  ) surged 11% today after its quarterly results and guidance easily topped Wall Street estimates.

So what: Dolby's fourth-quarter beat was so wide -- EPS of $0.81 trounced the consensus estimate of $0.59 -- that analysts have no choice but to increase their growth projections. Dolby shares have been battered in recent months on concerns over the loss of PC-related revenue, but licensing revenue growth of 15% suggests that it is positioned just fine in other attractive markets.

Now what: Looking ahead, management now sees full-year fiscal 2012 EPS of $2.71-$3.02, which also thumped Wall Street's EPS forecast of $2.66. "We continue to see a significant opportunity in broadcast and remain focused on extending our technologies to online content and a growing array of portable devices," CEO Kevin Yeaman said. More importantly, with the stock still down around 55% year to date and sporting a cheapish forward P/E of roughly 11, buying into that optimism won't come at a high price.

Interested in more info on Dolby? Add it to your watchlist.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Dolby. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


Read/Post Comments (0) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 1592095, ~/Articles/ArticleHandler.aspx, 8/1/2014 5:37:28 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement