Unity Software (NYSE:U) Cut to Hold at Zacks Research

Zacks Research downgraded shares of Unity Software (NYSE:U) from a strong-buy rating to a hold rating in a research note released on Tuesday morning,Zacks reports.

A number of other research analysts have also commented on the company. UBS Group reaffirmed an “outperform” rating on shares of Unity Software in a research report on Friday, August 7th. BTIG Research lifted their price objective on Unity Software from $43.00 to $51.00 and gave the stock a “buy” rating in a research report on Thursday, August 6th. Raymond James Financial initiated coverage on Unity Software in a research note on Monday, June 29th. They set a “market perform” rating on the stock. Benchmark upgraded Unity Software from a “hold” rating to a “buy” rating and set a $50.00 target price for the company in a report on Friday, August 7th. Finally, Oppenheimer raised their price target on Unity Software from $38.00 to $47.00 and gave the stock an “outperform” rating in a research note on Friday, August 7th. One equities research analyst has rated the stock with a Strong Buy rating, eighteen have assigned a Buy rating, three have issued a Hold rating and one has given a Sell rating to the stock. According to data from MarketBeat, the stock has an average rating of “Moderate Buy” and an average price target of $45.55.

Unity Software Price Performance

U stock opened at $45.83 on Tuesday. The stock has a market capitalization of $20.17 billion, a price-to-earnings ratio of -33.70, a PEG ratio of 1.99 and a beta of 2.11. The firm’s 50-day moving average price is $42.66 and its two-hundred day moving average price is $32.42. The company has a current ratio of 2.03, a quick ratio of 2.03 and a debt-to-equity ratio of 0.55. Unity Software has a 12-month low of $16.78 and a 12-month high of $52.15.

Unity Software (NYSE:U) last posted its earnings results on Thursday, August 6th. The company reported $0.28 earnings per share for the quarter, topping analysts’ consensus estimates of ($0.11) by $0.39. The company had revenue of $546.47 million during the quarter, compared to analyst estimates of $514.72 million. Unity Software had a negative net margin of 28.97% and a positive return on equity of 4.64%. Unity Software’s revenue for the quarter was up 24.0% on a year-over-year basis. During the same period in the prior year, the business posted $0.18 earnings per share. As a group, equities analysts predict that Unity Software will post 0.55 earnings per share for the current year.

Insider Transactions at Unity Software

In other news, CFO Jarrod Yahes sold 26,017 shares of the stock in a transaction that occurred on Tuesday, August 25th. The stock was sold at an average price of $45.31, for a total value of $1,178,830.27. Following the completion of the transaction, the chief financial officer owned 678,343 shares of the company’s stock, valued at approximately $30,735,721.33. This represents a 3.69% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CEO Matthew S. Bromberg sold 16,383 shares of the firm’s stock in a transaction that occurred on Tuesday, August 25th. The shares were sold at an average price of $45.31, for a total value of $742,313.73. Following the completion of the transaction, the chief executive officer owned 1,541,131 shares of the company’s stock, valued at approximately $69,828,645.61. The trade was a 1.05% decrease in their position. The SEC filing for this sale provides additional information. The sale was made to cover tax withholding obligations related to the vesting of equity awards. In the last 90 days, insiders sold 109,547 shares of company stock valued at $4,884,202. Insiders own 0.77% of the company’s stock.

Institutional Trading of Unity Software

A number of hedge funds have recently modified their holdings of the business. Atreides Management LP bought a new position in shares of Unity Software in the 2nd quarter worth about $292,826,000. Resolute Advisors LLC boosted its stake in Unity Software by 473.3% during the second quarter. Resolute Advisors LLC now owns 4,766,219 shares of the company’s stock worth $136,219,000 after acquiring an additional 3,934,840 shares in the last quarter. Dimensional Fund Advisors LP boosted its stake in Unity Software by 52.8% during the first quarter. Dimensional Fund Advisors LP now owns 4,245,014 shares of the company’s stock worth $93,089,000 after acquiring an additional 1,465,962 shares in the last quarter. Renaissance Technologies LLC purchased a new stake in Unity Software in the first quarter worth about $54,534,000. Finally, Amundi increased its stake in shares of Unity Software by 4.7% during the second quarter. Amundi now owns 2,334,695 shares of the company’s stock valued at $66,726,000 after purchasing an additional 105,268 shares in the last quarter. Institutional investors own 73.46% of the company’s stock.

Trending Headlines about Unity Software

Here are the key news stories impacting Unity Software this week:

• Positive Sentiment: Google partnership provides the main catalyst. Unity and Google plan to launch AI-powered game-creation tools, including Playground and the forthcoming Unity Spark platform. The products are intended to let users create playable games with natural-language prompts, potentially broadening Unity’s market beyond professional developers. Google, Unity launch platform to create video games from prompts
• Positive Sentiment: Analysts raised their outlook. Raymond James upgraded Unity from “market perform” to “outperform” and set a $54 price target. Jefferies also raised its target from $50 to $54 and maintained a “buy” rating, representing meaningful potential upside from recent trading levels. Why Is Unity Software Stock Gaining Thursday?
• Positive Sentiment: Recent operating results support the bullish case. Unity’s latest reported quarter included revenue growth of 24% year over year and earnings of $0.28 per share, well above the consensus estimate of a loss. Investors see Google’s infrastructure and distribution as a way for Unity to add AI capabilities without bearing all associated development and computing costs.
• Neutral Sentiment: Valuation remains a debate. Unity has gained 24.2% over the past year but remains far below its five-year-ago level. Some investors view the stock as undervalued based on potential future cash flows, while others caution that the company must convert AI-driven user growth into sustainable profitability. Unity Stock Still Looks Undervalued Following Its 67% Five Year Fall
• Negative Sentiment: Not all analyst sentiment is positive. Zacks Research downgraded Unity from “strong-buy” to “hold,” highlighting the risk that the stock’s recent rally has increased expectations before the new AI products have demonstrated commercial traction.

Unity Software Company Profile

Unity Software Inc develops software and services for creating, operating and monetizing interactive, real-time 2D and 3D content. Its platform is widely used to build video games for mobile devices, personal computers, consoles and the web, as well as applications for industries such as automotive, architecture, engineering, construction, manufacturing and entertainment.

The company’s core offering is the Unity development platform, which includes tools for graphics, physics, animation, audio, scripting and cross-platform deployment.