Unity Software (NYSE:U) Stock Gets Price Target Increase from Citigroup

Key Points

• Citigroup raised Unity Software’s price target from $48 to $59 and maintained a Buy rating, implying 14.44% upside from the price cited in the report.
• Unity beat third-quarter expectations, with revenue up 32.2% year over year to $622.1 million and EPS of $0.44 versus a $0.03 consensus estimate. The company also reported its first GAAP-profitable quarter since its 2020 IPO.
• Growth in Unity’s Vector advertising product helped drive optimism: revenue rose 126%, and fourth-quarter revenue guidance of $688 million–$696 million topped the cited analyst consensus. Analysts’ average rating was Moderate Buy, with a consensus price target of $56.

Unity Software (NYSE:U - Get Free Report) had its price target raised by equities research analysts at Citigroup from $48.00 to $59.00 in a research report issued on Friday, Benzinga reports. The firm presently has a "buy" rating on the stock. Citigroup's price target would suggest a potential upside of 14.44% from the company's current price.

Several other equities analysts have also weighed in on the stock. Bank of America upgraded shares of Unity Software from a "neutral" rating to a "buy" rating and upped their price objective for the company from $30.00 to $50.00 in a report on Friday, August 7th. Citizens Jmp raised their target price on Unity Software from $45.00 to $70.00 and gave the company a "market outperform" rating in a research note on Friday. Weiss Ratings restated a "sell (d-)" rating on shares of Unity Software in a research note on Monday. Oppenheimer reaffirmed an "outperform" rating and issued a $64.00 target price (up from $47.00) on shares of Unity Software in a research report on Friday. Finally, Benchmark raised Unity Software from a "hold" rating to a "buy" rating and set a $50.00 price target on the stock in a research note on Friday, August 7th. One analyst has rated the stock with a Strong Buy rating, eighteen have assigned a Buy rating, three have given a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat, the stock currently has an average rating of "Moderate Buy" and a consensus target price of $56.00.

Unity Software Trading Up 5.6%

Shares of NYSE:U traded up $2.75 during mid-day trading on Friday, hitting $51.55. The company had a trading volume of 23,545,834 shares, compared to its average volume of 12,781,176. 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 has a one year low of $16.78 and a one year high of $52.91. The firm has a fifty day moving average price of $42.32 and a 200 day moving average price of $31.79. The company has a market capitalization of $22.69 billion, a PE ratio of -37.91, a price-to-earnings-growth ratio of 1.85 and a beta of 2.08.

Unity Software (NYSE:U - Get Free Report) last issued its earnings results on Thursday, November 5th. The company reported $0.44 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.03 by $0.41. The business had revenue of $622.09 million for the quarter, compared to analyst estimates of $567.03 million. Unity Software had a negative net margin of 28.97% and a positive return on equity of 4.64%. Unity Software's revenue was up 32.2% on a year-over-year basis. During the same period in the prior year, the firm earned $0.20 earnings per share. As a group, research analysts forecast that Unity Software will post 0.55 EPS for the current year.

Insider Buying and Selling

In other Unity Software news, CEO Matthew Bromberg sold 16,383 shares of the firm's stock in a transaction on Tuesday, August 25th. The stock was sold at an average price of $45.31, for a total transaction of $742,313.73. Following the transaction, the chief executive officer directly owned 1,541,131 shares in the company, valued at approximately $69,828,645.61. This trade represents a 1.05% 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, COO Alexander Blum sold 43,556 shares of Unity Software stock in a transaction on Friday, August 28th. The stock was sold at an average price of $43.51, for a total transaction of $1,895,121.56. Following the transaction, the chief operating officer directly owned 661,855 shares in the company, valued at $28,797,311.05. This represents a 6.17% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last quarter, insiders sold 109,547 shares of company stock valued at $4,884,202. 0.77% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently bought and sold shares of U. Atreides Management LP purchased a new stake in Unity Software in the second quarter valued at approximately $292,826,000. Resolute Advisors LLC lifted its position in Unity Software by 473.3% during the second quarter. Resolute Advisors LLC now owns 4,766,219 shares of the company's stock valued at $136,219,000 after purchasing an additional 3,934,840 shares during the last quarter. Dimensional Fund Advisors LP grew its stake in Unity Software by 52.8% in the 1st quarter. Dimensional Fund Advisors LP now owns 4,245,014 shares of the company's stock worth $93,089,000 after buying an additional 1,465,962 shares in the last quarter. Assenagon Asset Management S.A. grew its stake in Unity Software by 9,886.8% in the 3rd quarter. Assenagon Asset Management S.A. now owns 2,645,007 shares of the company's stock worth $108,260,000 after buying an additional 2,618,522 shares in the last quarter. Finally, Renaissance Technologies LLC purchased a new position in Unity Software in the 1st quarter worth approximately $54,534,000. Hedge funds and other institutional investors own 73.46% of the company's stock.

Key Stories Impacting Unity Software

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

• Positive Sentiment: Unity beat third-quarter expectations, reporting $622.1 million in revenue, up 32.2% year over year, and adjusted EPS of $0.44. It also recorded its first GAAP-profitable quarter since its 2020 IPO, with $122 million in net income. Unity Q3 earnings highlights
• Positive Sentiment: Growth in Vector, Unity’s AI-powered advertising product, was a standout: revenue rose 126%. Management’s fourth-quarter revenue guidance of $688 million–$696 million is well above the cited analyst consensus of $601.6 million, reinforcing expectations for continued growth. Unity Q3 earnings and Vector growth
• Positive Sentiment: Reports say Silver Lake and Saudi Arabia’s Public Investment Fund have held discussions about acquiring Unity. The reports have fueled investor interest, but discussions do not mean a deal has been reached. Reported takeover approach
• Positive Sentiment: Several firms raised their price targets and maintained bullish ratings, including Citizens JMP and Needham, which set targets of $70. Citizens JMP rating
• Neutral Sentiment: Investors will also be watching whether Unity can sustain the advertising momentum and improve its creator-tools business; one earnings analysis noted that creator tools are slowing. Analysis of Vector advertising and creator tools

About Unity Software

Unity Software Inc develops software and services for creating, operating and monetizing interactive, real-time content. Its core product is the Unity engine, a development platform used to build video games and experiences for mobile devices, personal computers, consoles, augmented and virtual reality systems, and other platforms.

The company also provides tools and services that support the development and operation of interactive applications, including collaboration and cloud-based development tools, multiplayer and voice communication capabilities, analytics, advertising, and in-app monetization solutions.

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