Unity Software (NYSE:U) Shares Gap Up Following Earnings Beat

Shares of Unity Software Inc. (NYSE:U) gapped up before the market opened on Thursday after the company announced better than expected quarterly earnings. The stock had previously closed at $42.46, but opened at $48.06. Unity Software shares last traded at $46.3890, with a volume of 15,145,550 shares changing hands.

The company reported $0.44 EPS for the quarter, beating the consensus estimate 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 company had revenue of $622.09 million for the quarter, compared to the consensus estimate of $567.03 million. During the same period in the prior year, the firm posted $0.20 EPS. The firm’s revenue was up 32.2% compared to the same quarter last year.

Key Headlines 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

Wall Street Analysts Forecast Growth

A number of brokerages recently issued reports on U. Citigroup raised their price target on Unity Software from $40.00 to $48.00 and gave the stock a “buy” rating in a research note on Monday, August 10th. Wedbush upped their price objective on Unity Software from $50.00 to $55.00 and gave the company an “outperform” rating in a research report on Wednesday, October 14th. 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 report on Friday, August 7th. UBS Group boosted their target price on shares of Unity Software from $48.00 to $49.00 and gave the company a “neutral” rating in a research note on Wednesday, October 28th. Finally, Morgan Stanley upped their price target on shares of Unity Software from $50.00 to $55.00 and gave the stock an “overweight” rating in a report on Tuesday, October 13th. One equities research analyst has rated the stock with a Strong Buy rating, seventeen have issued a Buy rating, four have issued a Hold rating and one has given a Sell rating to the company’s stock. According to data from MarketBeat, the company currently has an average rating of “Moderate Buy” and a consensus target price of $48.86.

Insider Buying and Selling at Unity Software

In related news, CEO Matthew S. Bromberg sold 16,383 shares of the company’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 completion of the sale, the chief executive officer directly owned 1,541,131 shares in the company, valued at $69,828,645.61. This represents a 1.05% decrease in their position. The sale was disclosed in a document filed 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 the firm’s stock in a transaction dated Tuesday, August 25th. The shares were sold at an average price of $45.31, for a total value of $1,178,830.27. Following the sale, the chief financial officer directly owned 678,343 shares in the company, valued at approximately $30,735,721.33. The trade was 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. Insiders have sold a total of 109,547 shares of company stock valued at $4,884,202 in the last ninety days. Company insiders own 0.77% of the company’s stock.

Institutional Inflows and Outflows

Large investors have recently modified their holdings of the company. Lido Advisors LLC lifted its holdings in shares of Unity Software by 109.6% in the 3rd quarter. Lido Advisors LLC now owns 29,446 shares of the company’s stock valued at $1,205,000 after buying an additional 15,400 shares during the period. Keybank National Association OH purchased a new stake in shares of Unity Software in the third quarter worth about $526,000. New York Life Investment Management LLC boosted its stake in shares of Unity Software by 31.1% in the third quarter. New York Life Investment Management LLC now owns 50,140 shares of the company’s stock worth $2,052,000 after buying an additional 11,902 shares during the last quarter. AlphaCore Capital LLC acquired a new stake in Unity Software during the third quarter worth about $547,000. Finally, Fulcrum Asset Management LLP acquired a new stake in Unity Software during the third quarter worth about $1,855,000. Institutional investors own 73.46% of the company’s stock.

Unity Software Stock Performance

The firm has a 50-day moving average of $42.23 and a two-hundred day moving average of $31.76. 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 has a market capitalization of $20.64 billion, a PE ratio of -34.48, a PEG ratio of 1.76 and a beta of 2.08.

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.