Dolby Laboratories, Inc. DLB has launched a new suite of cloud video products and solutions designed for real-time interactive streaming. Available as standalone tools or integrated solutions, they offer superior live sports and entertainment experiences.
This launch follows Dolby’s recent acquisition of THEO Technologies, a leading provider of premium video streaming tools used by prominent sports, media and entertainment companies globally.
THEOads is an advanced ad insertion tool that enhances advertising quality, flexibility and targeting within THEOplayer. Using server-guided ad insertion (SGAI) functionality, THEOads can optimally leverage THEOplayer’s capabilities to deliver more personalized and less intrusive ads, boosting viewer engagement and ad revenues without disrupting the viewing experience.
Apart from THEOads, Dolby and THEO’s combined solutions include Dolby Millicast for ultra-low latency streaming, Dolby Hybrik for transcoding and THEO’s cross-platform playback and live streaming tools like THEOplayer and THEOlive. These cutting-edge solutions are trusted by major sports, streaming and iGaming brands, such as FanDuel, ITV, Las Vegas Sands, NASCAR and the NFL, to enhance their live streaming services.
The combined offerings from Dolby and THEO elevate live experiences to be more interactive, personalized and delivered with minimal latency. With the introduction of THEOads at IBC 2024, these experiences now include advertisements tailored to the dynamic nature of live content, Dolby highlighted.
Synergies From Acquisitions to Aid DLB’s Top-Line Expansion
Dolby acquired THEO Technologies in July 2024, worth $55 million, to expand its Dolby.io offerings. With THEO, the company plans to address the growing demand for designing customized experiences in sports and entertainment.
Also, DLB announced the buyout of GE Licensing from GE Aerospace for $429 million in an all-cash transaction in June 2024. GE Licensing, a leading innovator in patent licensing and management, is a subsidiary of GE Aerospace that designs, develops and produces jet engines, components and integrated systems for military, commercial and business aircraft.
With this acquisition, Dolby expects to bolster its intellectual property portfolio through the strategic integration between its existing licensing businesses and GE Licensing's portfolio of video codec technologies (HEVC and VVC). The deal, likely to close by the end of fiscal 2024, is anticipated to be accretive on a non-GAAP basis to operating margins and earnings per share in fiscal 2025.
Synergies from the deal are likely to drive top-line expansion. Apart from inorganic growth, Dolby’s performance is gaining from the increasing adoption of Dolby Atmos and Dolby Vision.
Dolby Laboratories Price and Consensus
Dolby Laboratories price-consensus-chart | Dolby Laboratories Quote
In the fiscal third quarter, the company made significant strides in expanding the availability of its Dolby Vision and Dolby Atmos technologies across major verticals of autos, TVs and mobile. In May 2024, Dolby joined forces with VIZIO to make Dolby Atmos reachable to an expanded customer base. It is offering multi-dimensional sound experiences to consumers at a minimal price of $99. In April 2024, it announced that it was making Dolby Vision and Dolby Atmos available to all premium theater exhibitors.
Lower unit shipments of audio devices and cinema products due to weak demand trends at the box office are negatively impacting the top-line growth. Owing to these factors and the dynamic market conditions, management expects full-year revenues to be down 1-2%.
DLB’s Zacks Rank & Stock Price Performance
DLB currently carries a Zacks Rank #3 (Hold). Shares of the company have lost 11.8% in the past year against the sub-industry's growth of 5%.
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Stocks to Consider
Some better-ranked stocks from the broader technology space are Manhattan Associates, Inc. MANH, ANSYS, Inc. ANSS and Adobe Inc. ADBE. MANH presently sports a Zacks Rank #1 (Strong Buy), whereas ANSS & ADBE carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Manhattan Associates delivered an earnings surprise of 26.6%, on average, in the trailing four quarters. In the last reported quarter, MANH pulled off an earnings surprise of 22.9%. The Zacks Consensus Estimate for MANH has increased 9.2% in the past 60 days to $4.26.
ANSYS delivered an earnings surprise of 4.8%, on average, in three of the trailing four quarters. In the last reported quarter, ANSS pulled off an earnings surprise of 28.9%. It has a long-term earnings growth expectation of 6.4%.
Adobe delivered an earnings surprise of 2.6%, on average, in the trailing four quarters. In the last reported quarter, ADBE pulled off an earnings surprise of 2.7%. It has a long-term earnings growth expectation of 13%.
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