Unity Software (NYSE:U) Shares Gap Up – Should You Buy?

Unity Software Inc. (NYSE:U) gapped up prior to trading on Wednesday. The stock had previously closed at $44.95, but opened at $45.99. Unity Software shares last traded at $44.3650, with a volume of 4,219,337 shares trading hands.

Key Headlines Impacting Unity Software

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

• Positive Sentiment: Raymond James upgraded Unity to “outperform” from “market perform” and set a $54 price target. The firm cited Unity’s partnership with Google and believes the stock can continue rallying, providing a catalyst for the recent advance. Unity Software rises on back of Raymond James upgrade
• Positive Sentiment: Jefferies also raised its price target to $54 and maintained a “buy” rating. The additional analyst support reinforces the view that Unity’s improving growth outlook and artificial-intelligence strategy could justify further upside. Why Is Unity Software Stock Gaining Thursday?
• Positive Sentiment: Google and Unity are developing an AI-powered game-creation platform. The planned Playground and Unity Spark products would let users create playable games with text prompts, potentially expanding Unity’s creator base and funneling new users toward its professional engine. Google’s infrastructure and distribution could also help Unity pursue the opportunity without bearing all AI-development costs. Google, Unity launch platform to create video games from prompts
• Neutral Sentiment: Investor enthusiasm is tempered by valuation and profitability concerns. Unity remains loss-making despite recent earnings and revenue beats, while the AI platform’s commercial impact and launch timing are still unproven. Zacks Research downgraded the stock from “strong buy” to “hold,” highlighting the mixed analyst outlook. Unity Stock Still Looks Undervalued

Wall Street Analysts Forecast Growth

A number of equities analysts recently commented on the company. Raymond James Financial upgraded Unity Software from a “market perform” rating to an “outperform” rating and set a $54.00 target price for the company in a report on Thursday. Oppenheimer reissued an “outperform” rating on shares of Unity Software in a research report on Thursday. Benchmark raised shares of Unity Software from a “hold” rating to a “buy” rating and set a $50.00 price objective for the company in a research note on Friday, August 7th. BTIG Research lifted their price objective on shares of Unity Software from $43.00 to $51.00 and gave the company a “buy” rating in a report on Thursday, August 6th. Finally, Deutsche Bank Aktiengesellschaft raised shares of Unity Software from a “hold” rating to a “buy” rating and upped their target price for the stock from $31.00 to $50.00 in a research note on Friday, August 7th. One analyst has rated the stock with a Strong Buy rating, eighteen have issued a Buy rating, three have assigned a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat, the stock has a consensus rating of “Moderate Buy” and a consensus price target of $45.55.

Unity Software Price Performance

The stock’s 50 day moving average is $42.66 and its two-hundred day moving average is $32.42. The stock has a market capitalization of $20.17 billion, a PE ratio of -33.70, a price-to-earnings-growth ratio of 1.99 and a beta of 2.11. The company has a debt-to-equity ratio of 0.55, a current ratio of 2.03 and a quick ratio of 2.03.

Unity Software (NYSE:U) last issued its quarterly earnings results on Thursday, August 6th. The company reported $0.28 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of ($0.11) by $0.39. Unity Software had a negative net margin of 28.97% and a positive return on equity of 4.64%. The company had revenue of $546.47 million during the quarter, compared to the consensus estimate of $514.72 million. During the same quarter in the previous year, the firm earned $0.18 earnings per share. The firm’s quarterly revenue was up 24.0% on a year-over-year basis. As a group, sell-side analysts forecast that Unity Software Inc. will post 0.55 earnings per share for the current fiscal year.

Insider Activity

In related news, CFO Jarrod Yahes sold 26,017 shares of the business’s stock in a transaction on Tuesday, August 25th. The shares were sold at an average price of $45.31, for a total transaction of $1,178,830.27. Following the completion of the transaction, the chief financial officer owned 678,343 shares in the company, valued at approximately $30,735,721.33. The trade was a 3.69% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is accessible through the SEC website. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, SVP Rebecca Boyden sold 1,032 shares of the firm’s stock in a transaction on Tuesday, August 25th. The shares were sold at an average price of $45.32, for a total value of $46,770.24. Following the completion of the sale, the senior vice president owned 308,413 shares in the company, valued at approximately $13,977,277.16. This represents a 0.33% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The sale was made to cover tax withholding obligations related to the vesting of equity awards. In the last three months, insiders have sold 109,547 shares of company stock worth $4,884,202. 0.77% of the stock is currently owned by company insiders.

Hedge Funds Weigh In On Unity Software

A number of institutional investors and hedge funds have recently added to or reduced their stakes in the business. Summit Securities Group LLC purchased a new stake in shares of Unity Software during the 1st quarter worth approximately $54,000. Global Retirement Partners LLC purchased a new position in shares of Unity Software in the 2nd quarter valued at $56,000. Versant Capital Management Inc grew its position in shares of Unity Software by 37.6% in the 2nd quarter. Versant Capital Management Inc now owns 2,041 shares of the company’s stock valued at $58,000 after buying an additional 558 shares during the last quarter. Pacer Advisors Inc. raised its stake in Unity Software by 59.5% during the 1st quarter. Pacer Advisors Inc. now owns 2,626 shares of the company’s stock worth $58,000 after acquiring an additional 980 shares in the last quarter. Finally, Fifth Third Bancorp lifted its position in Unity Software by 284,400.0% in the first quarter. Fifth Third Bancorp now owns 2,845 shares of the company’s stock valued at $62,000 after acquiring an additional 2,844 shares during the last quarter. 73.46% of the stock is owned by institutional investors and hedge funds.

About Unity Software

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.