Is Dolby Laboratories, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Dolby Laboratories, Inc. has moved from very attractive to attractive, indicating a shift in perceived value. The company appears to be overvalued based on its current metrics, particularly with a P/E ratio of 27, which is higher than its peer average of approximately 25.9 for Dolby and 25.97 for Qualys, Inc. Additionally, the EV to EBITDA ratio stands at 17.08, which is also above the peer average of 16.2, suggesting that the stock may be priced too high relative to its earnings potential.
In comparison to its peers, Dolby's valuation ratios indicate a premium, especially when contrasted with Duolingo, Inc., which has a significantly higher P/E ratio of 104.9, and Informatica, Inc., which is considered risky with a P/E ratio of 1253.8. Moreover, the company's recent stock performance has been underwhelming, with a year-to-date return of -11.97% compared to the S&P 500's 13.30%, reinforcing the notion that Dolby may not be a compelling investment at its current valuation.