Unity Software (NYSE:U) Shares Down 9.5% - Here's What Happened

Key Points

• Unity Software shares fell 9.5% to approximately $39.91 in heavy midday trading, with volume about 21% above its average.
• Despite the decline, analysts remain broadly positive: Unity has a “Moderate Buy” consensus rating and an average price target of $45.16, with several firms recently upgrading the stock.
• The company’s latest quarter exceeded expectations, reporting $0.28 in EPS versus a projected loss of $0.11 and revenue of $546.47 million, up 24% year over year. Executives also sold shares, primarily through tax-related or pre-arranged transactions.

Unity Software Inc. (NYSE:U - Get Free Report) fell 9.5% on Thursday . The stock traded as low as $41.07 and last traded at $39.9110. Approximately 15,545,871 shares traded hands during mid-day trading, an increase of 21% from the average daily volume of 12,841,989 shares. The stock had previously closed at $44.10.

Analyst Ratings Changes

Several brokerages have recently weighed in on U. Benchmark upgraded Unity Software from a "hold" rating to a "buy" rating and set a $50.00 target price for the company in a research note on Friday, August 7th. Bank of America upgraded shares of Unity Software from a "neutral" rating to a "buy" rating and raised their price target for the stock from $30.00 to $50.00 in a research report on Friday, August 7th. Oppenheimer upped their price objective on Unity Software from $38.00 to $47.00 and gave the stock an "outperform" rating in a research note on Friday, August 7th. HSBC raised Unity Software from a "hold" rating to a "buy" rating and set a $47.10 price target on the stock in a report on Friday, August 7th. Finally, Wedbush increased their target price on shares of Unity Software from $32.00 to $36.00 and gave the company an "outperform" rating in a research report on Wednesday, July 22nd. Two analysts have rated the stock with a Strong Buy rating, seventeen have issued a Buy rating, three have assigned a Hold rating and one has assigned a Sell rating to the company. According to MarketBeat.com, the stock has an average rating of "Moderate Buy" and an average target price of $45.16.

Unity Software Stock Down 4.6%

The company has a market capitalization of $18.52 billion, a price-to-earnings ratio of -31.17, a price-to-earnings-growth ratio of 1.89 and a beta of 2.06. 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 business has a 50-day moving average price of $39.89 and a 200-day moving average price of $30.63.

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

Insider Activity

In other Unity Software news, CEO Matthew S. Bromberg sold 16,383 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 $742,313.73. Following the sale, the chief executive officer directly owned 1,541,131 shares of the company's stock, valued at $69,828,645.61. The trade was a 1.05% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through this hyperlink. 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 the firm's stock in a transaction on Friday, August 28th. The stock was sold at an average price of $43.51, for a total value of $1,895,121.56. Following the completion of the sale, the chief operating officer directly owned 661,855 shares of the company's stock, valued at approximately $28,797,311.05. This trade represents a 6.17% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 109,547 shares of company stock worth $4,884,202 over the last three months. 0.77% of the stock is owned by insiders.

Institutional Inflows and Outflows

Several large investors have recently bought and sold shares of U. QRG Capital Management Inc. boosted its position in Unity Software by 39.1% during the 2nd quarter. QRG Capital Management Inc. now owns 15,845 shares of the company's stock worth $453,000 after acquiring an additional 4,455 shares during the period. Sequoia Financial Advisors LLC increased its holdings in shares of Unity Software by 21.5% in the 2nd quarter. Sequoia Financial Advisors LLC now owns 14,124 shares of the company's stock valued at $404,000 after purchasing an additional 2,495 shares during the period. Tidal Investments LLC purchased a new stake in shares of Unity Software in the second quarter worth approximately $355,000. Integrated Wealth Concepts LLC boosted its holdings in shares of Unity Software by 21.9% during the second quarter. Integrated Wealth Concepts LLC now owns 104,354 shares of the company's stock worth $2,982,000 after purchasing an additional 18,733 shares during the period. Finally, NewEdge Advisors LLC boosted its holdings in shares of Unity Software by 2,316.0% during the second quarter. NewEdge Advisors LLC now owns 9,664 shares of the company's stock worth $276,000 after purchasing an additional 9,264 shares during the period. 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 media.

The company's core offerings include the Unity Engine and related development tools, which support graphics, physics, animation, audio, scripting and deployment across multiple platforms.

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