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Dolby Cinema Debuts in Germany, Extends European Footprint

Zacks Equity Research

Dolby Laboratories, Inc. DLB recently inked a strategic partnership with Kinopolis Gruppe, one the largest and most successful movie theatre firms in Germany, to augment cinematic experience in the country.

Per the deal, Dolby Cinema will mark its debut in Germany at the flagship site of Kinopolis at Mathäser Palast in Munich. The company is expected to amplify its presence in Europe, opening more such sites for the public.

Dolby Cinema brings in an unmatched cinema viewing experience through Dolby Vision and Dolby Atmos along with a rich combination of advanced technologies that give audience a realistic feel of onscreen action. The Dolby Vision laser projection system leverages state-of-the-art optics and image processing facilities to deliver unrivalled dynamic range with enhanced color technology and a contrast ratio. This produces strikingly vivid and realistic images, making viewers feel more connected to the movie settings. On the other hand, the Dolby Atmos immersive audio technology helps audience feel the sound clarity, moving sound around in three-dimensional space.

The Mathäser Palast Dolby Cinema site will have a separate entrance with lounge area for film fans for refreshments and beverages in a VIP-style lounge. It will also have 312 seats and 15 recliners in the first row for premium cinematic viewing.

Dolby Cinema technology is proving to be a major profit churner for the company. It is currently available in 10 countries with more than 20 exhibitor partners, 215 screens open and another 200 committed. Dolby Cinemas is enjoying exponential market traction and plans to bring Dolby Cinema to more countries. The content pipeline for Dolby Cinema continues to grow with more than 230 titles in Dolby Vision and Dolby Atmos announced or released.

Moving forward, Dolby believes that surging demand for premium viewing experiences will fuel growth for Dolby Cinema over the long haul. Market reports suggest that consumers are increasingly viewing video content on smartphones, tablets and computers, which in turn, is expected to unlock additional opportunities for the company.

However, the shares have recorded an average decline of 0.4% in the past year while the industry rallied 2.3%.

Dolby currently has a Zacks Rank #1 (Strong Buy). Some other top-ranked stocks in the industry are GoPro, Inc. GPRO, Sonos, Inc. SONO and Glu Mobile Inc. GLUU, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

GoPro has a long-term earnings growth expectation of 10%. It pulled off a four-quarter average positive earnings surprise of 28.1%.

Sonos pulled off positive earnings surprise of 37.1% and 25% in the past two quarters, respectively.

Glu Mobile has a long-term earnings growth expectation of 15%.

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