Unity Software Inc. (NYSE: U) Receives Consensus Recommendation of 'Moderate Buy' from Analysts

Unity Software Inc. (NYSE:U) has received a consensus recommendation of “Moderate Buy” from 23 analysts covering the stock, according to MarketBeat Ratings. Of the ratings, one firm rates the shares as a sell, eight assign a hold rating, 13 rate the stock as a buy, and one issues a strong buy. The average 12-month target price among brokerages that covered the company over the past year is $37.4105.

Recent analyst rating and target price changes

Several brokerages have adjusted their views on Unity Software in recent reports. Goldman Sachs lowered its price target from $47.00 to $27.00 and maintained a “neutral” rating. Bank of America increased its target from $19.00 to $21.00 and kept a “neutral” rating. Morgan Stanley raised its target from $30.00 to $32.00 and assigned an “overweight” rating. Wall Street Zen lowered the stock from “buy” to “hold.” Citizens Jmp reiterated a “market outperform” rating and set a $37.00 price target.

Insider transactions

Unity Software insiders have sold shares in recent transactions. CFO Jarrod Yahes sold 6,205 shares on March 5 at an average price of $21.03, for total proceeds of $130,491.15. After the sale, the CFO directly owned 728,381 shares, valued at approximately $15,317,852.43, representing a 0.84% decrease in the position.

CAO Mark Barrysmith sold 10,578 shares on February 25 at an average price of $18.07, for total proceeds of $191,144.46. Following the transaction, the CAO owned 383,901 shares valued at approximately $6,937,091.07, a 2.68% decrease in the position.

In the last 90 days, insiders sold 41,684 shares valued at $773,350. Corporate insiders own 3.61% of the stock.

Institutional ownership

Institutional investors have also adjusted their positions. Root Financial Partners LLC bought a new stake in the third quarter valued at approximately $27,000. REAP Financial Group LLC purchased a new position in the fourth quarter worth approximately $28,000. Larson Financial Group LLC increased its holdings by 88.1% in the third quarter and now owns 728 shares valued at $29,000 after buying an additional 341 shares during the last quarter. V Square Quantitative Management LLC acquired a new stake in the fourth quarter valued at approximately $30,000. IFP Advisors Inc bought a new stake in the third quarter worth $33,000.

Overall, 73.46% of the stock is currently owned by institutional investors.

Market performance and valuation metrics

Shares of Unity Software opened at $22.75 on Friday. The company reported a quick ratio of 1.84 and a current ratio of 1.84, with a debt-to-equity ratio of 0.52. Unity Software’s 12-month range is $15.33 to $52.15. The stock’s 50-day moving average is $22.36 and its 200-day moving average is $34.96.

Unity Software’s market capitalization is $9.93 billion. Valuation metrics include a price-to-earnings ratio of -23.70, a price-to-earnings-growth ratio of 10.03, and a beta of 2.00.

Latest earnings results

Unity Software last reported quarterly earnings on Wednesday, February 11. The company posted EPS of $0.24 for the quarter, exceeding the consensus estimate of $0.20 by $0.04. Unity Software reported a negative return on equity of 4.76% and a negative net margin of 21.77%.

Revenue for the quarter was $503.09 million, compared with the consensus estimate of $490.64 million. In the same quarter last year, Unity Software posted EPS of ($0.30). Revenue increased 10.1% year over year. Analysts on average forecast Unity Software will post -1.25 earnings per share for the current year.

Company overview

Unity Software is a provider of a real-time 3D development platform used by creators across industries to design, build, and operate interactive, real-time experiences. While originally focused on game development, Unity’s technology is used in sectors including film, automotive, architecture, engineering, and construction, supporting immersive content across mobile, desktop, console, augmented reality, and virtual reality devices.

The company’s core offering includes a suite of authoring tools, runtime engines, and cloud services that streamline the creation and deployment of interactive 3D applications. The Unity Editor is described as the central hub where developers design scenes, script behavior, and iterate on assets.