Unity Software (NYSE:U) Shares Down 5.9% - What's Next?

Key Points

• Unity Software shares fell 5.9% on Monday, trading as low as $26.75 after closing at $28.16, with volume far below average. The stock’s move came despite recent analyst coverage remaining generally positive.
• Wall Street sentiment is mixed but still leans constructive: Unity has an average rating of “Moderate Buy” and a consensus target price of $38.77. Recent price targets ranged from $28 to $43, with several firms reiterating buy or outperform ratings.
• The company’s latest earnings beat expectations, reporting $0.24 EPS on revenue of $503.09 million, both above estimates, while revenue rose 10.1% year over year. Even so, Unity remains unprofitable, and insider selling has continued in recent months.

Unity Software Inc. (NYSE:U - Get Free Report)'s share price traded down 5.9% during trading on Monday . The company traded as low as $26.75 and last traded at $26.49. 1,080,797 shares traded hands during trading, a decline of 93% from the average session volume of 16,412,152 shares. The stock had previously closed at $28.16.

Wall Street Analyst Weigh In

Several brokerages recently issued reports on U. UBS Group raised their target price on shares of Unity Software from $26.00 to $28.00 and gave the company a "neutral" rating in a research note on Tuesday, May 5th. Citizens Jmp reiterated a "market outperform" rating and issued a $37.00 target price on shares of Unity Software in a research note on Friday, March 27th. BTIG Research raised their target price on shares of Unity Software from $39.00 to $43.00 and gave the company a "buy" rating in a research note on Thursday. Citigroup cut their target price on shares of Unity Software from $43.00 to $40.00 and set a "buy" rating for the company in a research note on Thursday, April 30th. Finally, Weiss Ratings reiterated a "sell (d-)" rating on shares of Unity Software in a research note on Wednesday, January 21st. One research analyst has rated the stock with a Strong Buy rating, twelve have assigned a Buy rating, eight have issued a Hold rating and one has issued a Sell rating to the company's stock. According to data from MarketBeat, the company presently has an average rating of "Moderate Buy" and a consensus target price of $38.77.

Unity Software Price Performance

The firm has a market capitalization of $11.70 billion, a price-to-earnings ratio of -17.08, a P/E/G ratio of 10.37 and a beta of 2.04. The company's 50 day moving average is $22.06 and its 200-day moving average is $32.57. The company has a current ratio of 1.84, a quick ratio of 1.84 and a debt-to-equity ratio of 0.52.

Unity Software (NYSE:U - Get Free Report) last released its quarterly earnings results on Wednesday, February 11th. The company reported $0.24 earnings per share for the quarter, beating the consensus estimate of $0.20 by $0.04. The firm had revenue of $503.09 million for the quarter, compared to analysts' expectations of $490.64 million. Unity Software had a negative net margin of 34.99% and a negative return on equity of 1.27%. The business's revenue was up 10.1% on a year-over-year basis. During the same period in the prior year, the firm earned ($0.30) EPS. Equities research analysts anticipate that Unity Software Inc. will post 0.13 earnings per share for the current year.

Insider Buying and Selling at Unity Software

In other Unity Software news, CFO Jarrod Yahes sold 12,196 shares of the stock in a transaction dated Wednesday, February 25th. The shares were sold at an average price of $18.07, for a total value of $220,381.72. Following the transaction, the chief financial officer directly owned 533,933 shares of the company's stock, valued at $9,648,169.31. This represents a 2.23% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, CAO Mark Barrysmith sold 10,578 shares of the stock in a transaction dated Wednesday, February 25th. The shares were sold at an average price of $18.07, for a total transaction of $191,144.46. Following the completion of the transaction, the chief accounting officer directly owned 383,901 shares in the company, valued at approximately $6,937,091.07. This represents a 2.68% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders have sold a total of 41,684 shares of company stock valued at $773,350 in the last three months. 0.77% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

Several large investors have recently bought and sold shares of the stock. Vanguard Group Inc. increased its holdings in shares of Unity Software by 2.8% during the third quarter. Vanguard Group Inc. now owns 34,556,611 shares of the company's stock worth $1,383,647,000 after purchasing an additional 930,293 shares during the period. Broad Peak Investment Advisers Pte Ltd increased its holdings in shares of Unity Software by 43.6% during the third quarter. Broad Peak Investment Advisers Pte Ltd now owns 2,849,437 shares of the company's stock worth $114,091,000 after purchasing an additional 865,179 shares during the period. Maytree Asset Management Ltd increased its holdings in shares of Unity Software by 112.0% during the third quarter. Maytree Asset Management Ltd now owns 217,846 shares of the company's stock worth $8,723,000 after purchasing an additional 115,111 shares during the period. Massachusetts Financial Services Co. MA bought a new position in shares of Unity Software during the third quarter worth approximately $106,233,000. Finally, Principal Financial Group Inc. increased its holdings in shares of Unity Software by 46.5% during the third quarter. Principal Financial Group Inc. now owns 211,686 shares of the company's stock worth $8,476,000 after purchasing an additional 67,219 shares during the period. 73.46% of the stock is owned by institutional investors.

About Unity Software

Unity Software is a leading provider of a real-time 3D development platform that enables creators across industries to design, build and operate interactive, real-time experiences. Originally focused on the game development market, Unity's technology now extends into sectors such as film, automotive, architecture, engineering and construction, delivering immersive content for mobile, desktop, console, augmented reality and virtual reality devices. The company's core offering comprises a suite of authoring tools, runtime engines and cloud services that streamline the creation and deployment of interactive 3D applications.

The Unity Editor serves as the central hub where developers design scenes, script behavior and iterate on assets.

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