Dolby Stock Down 18%, Yet This $8 Million Bet Signals Turnaround Potential
Key Points
Neo Ivy Capital Management acquired 117,964 shares of DLB in the fourth quarter.
The quarter-end stake value increased by $7.58 million due to the new shares acquired.
DLB position accounts for 1.2% of fund AUM, placing it inside Neo Ivy’s top five holdings.
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On February 13, 2026, Neo Ivy Capital Management disclosed a new position in Dolby Laboratories (NYSE:DLB), acquiring 117,964 shares in a trade estimated at $7.58 million.
What happened
Neo Ivy Capital Management reported in a February 13, 2026, SEC filing that it established a new stake in Dolby Laboratories, acquiring 117,964 shares. The estimated transaction value was $7.58 million.
What else to know
- This new position in DLB represents 1.2% of Neo Ivy’s reportable U.S. equity AUM after the fourth quarter filing.
- Top holdings after the filing:
- NYSE: F: $7.61 million (1.2% of AUM)
- NYSE: DLB: $7.58 million (1.2% of AUM)
- NYSE: WELL: $7.56 million (1.2% of AUM)
- NASDAQ: ROIV: $7.41 million (1.2% of AUM)
- NASDAQ: NVDA: $7.35 million (1.2% of AUM)
- As of February 12, 2026, shares of DLB were priced at $66.57, down 18.2% over the past year and underperforming the S&P 500 by 31.08 percentage points.
Company overview
| Metric | Value |
|---|---|
| Price (as of market close 2026-02-12) | $66.57 |
| Market Capitalization | $6.37 billion |
| Revenue (TTM) | $1.34 billion |
| Net Income (TTM) | $276.72 million |
Company snapshot
- Dolby Laboratories develops and licenses advanced audio and imaging technologies, including Dolby Atmos, Dolby Vision, and a suite of digital codecs for cinema, broadcast, streaming, and consumer electronics.
- The company generates revenue primarily through technology licensing agreements and sales of specialized hardware for entertainment and communications markets.
- It serves film studios, content creators, post-production facilities, cinema operators, broadcasters, and device manufacturers worldwide.
Dolby Laboratories is a leading provider of audio and imaging innovations, leveraging its proprietary technologies to enhance entertainment experiences across multiple platforms. The company combines a robust licensing model with hardware solutions, enabling global reach and recurring revenue streams. Its established presence in both professional and consumer markets supports sustained growth and a defensible competitive position.
What this transaction means for investors
Durable licensing franchises rarely trade at discounts for long. That tension makes this new stake in Dolby worth watching.
Shares are down 18.2% over the past year, but the fundamentals tell a steadier story. In the first quarter of fiscal 2026, revenue totaled $347 million, down from $357 million one year prior but with $319.8 million coming from high-margin licensing streams. Meanwhile, gross profit reached $303.5 million, and the company generated $53.3 million in GAAP net income. And even more telling, Dolby repurchased roughly 1 million shares for about $70 million and still ended the quarter with $207 million remaining under its buyback authorization.
That matters because this is not a capital-intensive turnaround story. It is a licensing machine with roughly 90% gross margins and a balance sheet showing over $640 million in cash and equivalents. Compared with other holdings clustered around cyclical industrial and commodity names, this adds a royalty-driven, asset-light counterweight.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Dolby Laboratories, Nvidia, and Palantir Technologies. The Motley Fool recommends Roivant Sciences. The Motley Fool has a disclosure policy.
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