Analyzing Amplitude (NASDAQ:AMPL) and Unity Software (NYSE:U)

Amplitude (NASDAQ:AMPL) and Unity Software (NYSE:U) are both technology companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, analyst recommendations, earnings, risk and institutional ownership.

Volatility and Risk

Amplitude has a beta of 1.49, meaning that its stock price is 49% more volatile than the S&P 500. Comparatively, Unity Software has a beta of 2.11, meaning that its stock price is 111% more volatile than the S&P 500.

Institutional and Insider Ownership

73.2% of Amplitude shares are held by institutional investors. Comparatively, 73.5% of Unity Software shares are held by institutional investors. 21.6% of Amplitude shares are held by insiders. Comparatively, 0.8% of Unity Software shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Amplitude and Unity Software’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Amplitude	-26.59%	-42.62%	-22.69%
Unity Software	-28.97%	4.64%	2.16%

Analyst Ratings

This is a summary of recent ratings for Amplitude and Unity Software, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Amplitude	1	2	7	1	2.73
Unity Software	1	3	18	1	2.83

Amplitude presently has a consensus price target of $13.90, suggesting a potential downside of 8.43%. Unity Software has a consensus price target of $48.01, suggesting a potential upside of 18.13%. Given Unity Software’s stronger consensus rating and higher probable upside, analysts clearly believe Unity Software is more favorable than Amplitude.

Earnings & Valuation

This table compares Amplitude and Unity Software”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Amplitude	$343.21 million	4.48	-$88.54 million	($0.75)	-20.24
Unity Software	$1.85 billion	9.67	-$402.77 million	($1.36)	-29.88

Amplitude has higher earnings, but lower revenue than Unity Software. Unity Software is trading at a lower price-to-earnings ratio than Amplitude, indicating that it is currently the more affordable of the two stocks.

Summary

Unity Software beats Amplitude on 9 of the 14 factors compared between the two stocks.

About Amplitude

Amplitude, Inc., together with its subsidiaries, provides a digital analytics platform that analyzes customer behavior in the United States and internationally. It offers Amplitude Analytics, which provides real-time product data and reconstructed user visits; Amplitude Experiment, a solution that allows teams to test new capabilities and safely roll out new features; Amplitude CDP, an insight-driven solution that encompasses the data infrastructure, audience management, and data streaming capabilities; and Amplitude Session Replay used by product, marketing, and data teams to understand user behavior, diagnose product issues, and improve product outcomes. The company also provides customer support services related to initial implementation setup, ongoing support, and application training. It delivers its application over the Internet as a subscription service using a software-as-a-service model. The company was formerly known as Sonalight, Inc. and changed its name to Amplitude, Inc. in December 2014. Amplitude, Inc. was incorporated in 2011 and is headquartered in San Francisco, California.

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. The company was founded in 2004 and is headquartered in San Francisco, California.