Dolby Laboratories, Inc.’s (NYSE:DLB) Share Price Not Quite Adding Up
Dolby Laboratories, Inc.’s (NYSE:DLB) price-to-earnings (or “P/E”) ratio of 28.9x might make it look like a sell right now compared to the market in the United States, where around half of the companies have P/E ratios below 19x and even P/E’s below 11x are quite common. Nonetheless, we’d need to dig a little deeper to determine if there is a rational basis for the elevated P/E.
With earnings growth that’s superior to most other companies of late, Dolby Laboratories has been doing relatively well. It seems that many are expecting the strong earnings performance to persist, which has raised the P/E. You’d really hope so, otherwise you’re paying a pretty hefty price for no particular reason.
