Unity Software (NYSE:U) Trading Down 7.7% After Analyst Downgrade

Key Points

• Unity Software stock dropped 7.7% following a downgrade from HSBC, which changed its rating from "buy" to "hold" and set a price target of $40.80.
• Analysts have mixed sentiments about Unity, with two giving a Strong Buy rating and several maintaining a Hold rating, leading to an average price target of $31.65.
• Insider trading activity shows significant sales, with Director Tomer Bar-Zeev selling 150,000 shares valued at over $5.6 million, indicating potential concerns about stock performance.

Unity Software Inc. (NYSE:U - Get Free Report) fell 7.7% on Tuesday after HSBC downgraded the stock from a buy rating to a hold rating. HSBC now has a $40.80 price target on the stock. Unity Software traded as low as $40.41 and last traded at $39.64. 1,561,513 shares traded hands during trading, a decline of 87% from the average session volume of 12,139,109 shares. The stock had previously closed at $42.94.

Several other research analysts have also recently weighed in on the company. Jefferies Financial Group increased their price objective on Unity Software from $29.00 to $35.00 and gave the stock a "buy" rating in a research report on Wednesday, July 16th. Zacks Research cut shares of Unity Software from a "strong-buy" rating to a "hold" rating in a research note on Wednesday, August 13th. Bank of America initiated coverage on shares of Unity Software in a research report on Thursday, June 26th. They issued an "underperform" rating and a $15.00 price target for the company. Wall Street Zen upgraded Unity Software from a "hold" rating to a "buy" rating in a research note on Saturday, August 9th. Finally, UBS Group upped their target price on Unity Software from $22.00 to $33.00 and gave the company a "neutral" rating in a research report on Thursday, July 17th. Two investment analysts have rated the stock with a Strong Buy rating, seven have assigned a Buy rating, eight have given a Hold rating and two have given a Sell rating to the stock. According to MarketBeat, the company has a consensus rating of "Hold" and an average price target of $31.65.

Insider Transactions at Unity Software

In other news, Director Tomer Bar-Zeev sold 150,000 shares of the stock in a transaction on Tuesday, September 2nd. The stock was sold at an average price of $37.75, for a total value of $5,662,500.00. Following the completion of the transaction, the director directly owned 1,948,146 shares in the company, valued at approximately $73,542,511.50. This represents a 7.15% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, COO Alexander Blum sold 63,813 shares of the firm's stock in a transaction on Wednesday, August 27th. The shares were sold at an average price of $39.41, for a total value of $2,514,870.33. Following the sale, the chief operating officer directly owned 603,811 shares in the company, valued at approximately $23,796,191.51. This trade represents a 9.56% decrease in their position. The disclosure for this sale can be found here. In the last three months, insiders have sold 2,134,426 shares of company stock valued at $89,426,284. 3.61% of the stock is owned by company insiders.

Institutional Investors Weigh In On Unity Software

A number of institutional investors have recently added to or reduced their stakes in the company. Corient Private Wealth LLC purchased a new stake in shares of Unity Software during the 2nd quarter valued at $355,000. Osaic Holdings Inc. grew its stake in shares of Unity Software by 9.5% during the 2nd quarter. Osaic Holdings Inc. now owns 35,892 shares of the company's stock worth $868,000 after acquiring an additional 3,111 shares during the period. Marex Group plc bought a new stake in shares of Unity Software in the second quarter valued at approximately $281,000. Advisory Services Network LLC boosted its holdings in Unity Software by 13.7% in the 2nd quarter. Advisory Services Network LLC now owns 43,702 shares of the company's stock worth $1,058,000 after buying an additional 5,255 shares during the period. Finally, State of Wyoming bought a new stake in Unity Software during the 2nd quarter valued at $721,000. 73.46% of the stock is owned by institutional investors.

Unity Software Trading Down 7.5%

The firm has a 50-day simple moving average of $39.02 and a 200-day simple moving average of $28.67. The company has a quick ratio of 2.73, a current ratio of 2.73 and a debt-to-equity ratio of 0.70. The stock has a market cap of $16.79 billion, a PE ratio of -37.65 and a beta of 2.33.

Unity Software (NYSE:U - Get Free Report) last issued its quarterly earnings data on Wednesday, August 6th. The company reported ($0.26) earnings per share (EPS) for the quarter, missing analysts' consensus estimates of ($0.25) by ($0.01). Unity Software had a negative return on equity of 13.59% and a negative net margin of 24.38%.The company had revenue of $440.94 million for the quarter, compared to analysts' expectations of $425.18 million. During the same period last year, the company posted ($0.32) EPS. The business's revenue for the quarter was down 1.9% on a year-over-year basis. Equities analysts forecast that Unity Software Inc. will post -1.25 earnings per share for the current year.

About Unity Software

Unity Software Inc operates a real-time 3D development platform. Its platform provides software solutions to create, run, and monetize interactive, real-time 2D and 3D content for mobile phones, tablets, PCs, consoles, and augmented and virtual reality devices. The company offers its solutions directly through its online store and field sales operations in North America, Denmark, Finland, the United Kingdom, Germany, Japan, China, Singapore, and South Korea, as well as indirectly through independent distributors and resellers worldwide.

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