Unity Software Sees Unusually High Options Volume (NYSE:U)

Key Points

• Unity call-option trading surged: Traders bought 44,938 call options, 38% above the typical daily volume of 32,469.
• Quarterly results beat expectations: Revenue rose 32.2% year over year to $622.1 million, and EPS of $0.44 topped the $0.03 consensus; management’s fourth-quarter guidance also exceeded expectations.
• Unity shares climbed $5.92 to $48.38 during Thursday trading, on volume more than double the stock’s average. Recent insider share sales were disclosed as transactions to cover tax withholding on vested equity awards.

Unity Software Inc. (NYSE:U - Get Free Report) was the recipient of unusually large options trading activity on Thursday. Traders purchased 44,938 call options on the stock. This is an increase of 38% compared to the typical daily volume of 32,469 call options.

Insider Activity

In other Unity Software news, SVP Rebecca Boyden sold 1,032 shares of the 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 $13,977,277.16. This trade represents a 0.33% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available through this link. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CFO Jarrod Yahes sold 26,017 shares of Unity Software stock in a transaction dated 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 directly owned 678,343 shares of the company's stock, valued at approximately $30,735,721.33. This trade represents a 3.69% decrease in their position. 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. Over the last three months, insiders sold 109,547 shares of company stock valued at $4,884,202. 0.77% of the stock is owned by insiders.

Institutional Trading of Unity Software

Several institutional investors have recently added to or reduced their stakes in the company. V Square Quantitative Management LLC boosted its stake in shares of Unity Software by 14.6% in the third quarter. V Square Quantitative Management LLC now owns 2,329 shares of the company's stock valued at $95,000 after buying an additional 297 shares during the period. Fortitude Family Office LLC grew its position in Unity Software by 56.1% during the third quarter. Fortitude Family Office LLC now owns 840 shares of the company's stock worth $34,000 after buying an additional 302 shares in the last quarter. Elevation Wealth Partners LLC increased its stake in Unity Software by 15.0% during the 3rd quarter. Elevation Wealth Partners LLC now owns 2,628 shares of the company's stock worth $108,000 after acquiring an additional 342 shares during the period. Pictet Asset Management Holding SA increased its stake in Unity Software by 0.7% during the 3rd quarter. Pictet Asset Management Holding SA now owns 51,640 shares of the company's stock worth $2,114,000 after acquiring an additional 346 shares during the period. Finally, KBC Group NV increased its stake in Unity Software by 1.0% during the 1st quarter. KBC Group NV now owns 52,505 shares of the company's stock worth $1,152,000 after acquiring an additional 545 shares during the period. 73.46% of the stock is currently owned by institutional investors.

Unity Software Stock Performance

Shares of NYSE U traded up $5.92 during mid-day trading on Thursday, reaching $48.38. 27,891,247 shares of the company were exchanged, compared to its average volume of 12,626,713. The stock has a market capitalization of $21.29 billion, a P/E ratio of -35.51, a P/E/G ratio of 1.76 and a beta of 2.08. The company has a quick ratio of 2.03, a current ratio of 2.03 and a debt-to-equity ratio of 0.55. The company's 50-day simple moving average is $42.23 and its 200-day simple moving average is $31.76. Unity Software has a twelve month low of $16.78 and a twelve month high of $52.15.

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

Key Stories Impacting Unity Software

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

• Positive Sentiment: Third-quarter revenue rose 32.2% year over year to $622.1 million, topping the $567 million consensus. Earnings per share of $0.44 also exceeded estimates of $0.03, while Unity reported $122 million in GAAP net income versus a $127 million loss a year earlier. Unity Q3 financial results
• Positive Sentiment: Management’s fourth-quarter guidance came in well above Wall Street expectations, adding to optimism that recent business momentum can continue. Coverage highlighted Unity’s Vector advertising business as a key contributor to growth and profitability. Unity earnings and guidance
• Neutral Sentiment: Unity’s PvX partnership gives eligible studios access to user-acquisition financing and advertising support, potentially directing more marketing activity through Unity’s ecosystem. The deal may support longer-term growth, but it was announced before the earnings report and was not the main immediate catalyst. Unity user-acquisition funding
• Negative Sentiment: Some coverage cautioned that Unity’s creator-tools business is slowing as advertising becomes more important to results. A separate valuation analysis also argued the shares may be expensive, raising the risk that strong expectations are already reflected in the stock. Unity business trends

Analysts Set New Price Targets

A number of equities analysts recently commented on U shares. UBS Group lifted their price target on Unity Software from $48.00 to $49.00 and gave the stock a "neutral" rating in a report on Wednesday, October 28th. Zacks Research cut Unity Software from a "strong-buy" rating to a "hold" rating in a research report on Tuesday, October 6th. Benchmark raised Unity Software from a "hold" rating to a "buy" rating and set a $50.00 price objective for the company in a research report on Friday, August 7th. Jefferies Financial Group lifted their target price on Unity Software from $50.00 to $54.00 and gave the stock a "buy" rating in a research note on Thursday, October 8th. Finally, Wells Fargo & Company boosted their target price on Unity Software from $48.00 to $53.00 and gave the stock an "overweight" rating in a report on Monday, October 12th. One equities research analyst has rated the stock with a Strong Buy rating, seventeen have given a Buy rating, four have issued a Hold rating and one has assigned a Sell rating to the stock. According to MarketBeat, Unity Software has a consensus rating of "Moderate Buy" and a consensus target price of $48.86.

Unity Software Company Profile

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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