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. The company appears to be overvalued based on its current metrics. The P/E ratio stands at 27, which is significantly higher than its peer average of approximately 25.89. Additionally, the EV to EBITDA ratio of 17.08 also exceeds the peer average of 16.20, while the PEG ratio of 2.73 indicates that the stock may be overvalued relative to its growth prospects.
In comparison to its peers, Dolby's valuation ratios suggest a premium position, especially when juxtaposed with Duolingo, Inc., which has a P/E of 104.90, and Qualys, Inc., with a P/E of 25.97. The stock has underperformed against the S&P 500 across multiple periods, with a year-to-date return of -11.97% compared to the index's 13.30%, reinforcing the notion that Dolby may be overvalued in the current market environment.