DLB
Dolby Laboratories, Inc.
$54.71
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Fair Value
Trading 2.3% below fair value
You pay
$54.71
Bear
$44.80
Fair
$56.01
Bull
$67.21
Bear
$44.80
-18.1%
$2.97 × 12x P/E
Fair
$56.01
+2.4%
$2.97 × 15x P/E
Bull
$67.21
+22.8%
$2.97 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
18.4x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $90.33 from 17 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $56.01 per share.
Warnings
Dividend-based valuation: $654.73 (above our primary estimate by 1369%). 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 51% 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