DLB
Dolby Laboratories, Inc.
$58.68
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 4.2% above fair value
You pay
$58.68
Bear
$47.16
Fair
$56.33
Bull
$65.50
Bear
$47.16
-19.6%
$2.62 × 18x P/E
Fair
$56.33
-4.0%
$2.62 × 22x P/E
Bull
$65.50
+11.6%
$2.62 × 25x P/E
Adjust Assumptions
21.5x
2.62$
Key Value Driver
Normalized P/E multiple (22x base case)
Implied Market Multiple
22.4x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (17 analysts)
$90.33
Divergence from AlphaVal
38%
Summary
Applying a 22x P/E to adjusted EPS of $2.62, the base-case value is $56.33 per share. DDM cross-check: $356.39.
Warnings
Dividend-based valuation: $356.39 (above our primary estimate by 533%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $90.33 (from 17 analysts). Our estimate is 38% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples