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Dolby Laboratories, Inc.

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Impressive market traction of Dolby Cinema technology is proving to be a major profit churner for Dolby. Moreover, the company believes that surging demand for premium viewing experiences will fuel growth for Dolby Cinema over the long haul. The company’s growth strategy stands on three pillars, advancing the science of sight and sound, providing creative solutions, and delivering superior experiences. Successful execution in each of these areas has led to healthy growth over the past quarters. The stock has also outperformed the industry in the past three months on an average. However, escalating cost of sales has been a major concern for Dolby. Its products and services segments are witnessing declining revenue trends, which is hurting overall operating performance. Stiff competition, price-sensitive nature of the entertainment industry and fluctuations of cinema product sales pose significant threats to the company’s margin.

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