Unity Software (NYSE:U) Shares Gap Down Following Analyst Downgrade

Unity Software Inc. (NYSE:U)’s stock price gapped down prior to trading on Wednesday after UBS Group lowered their price target on the stock from $46.00 to $32.00. The stock had previously closed at $29.06, but opened at $21.41. UBS Group currently has a neutral rating on the stock. Unity Software shares last traded at $19.3670, with a volume of 39,431,631 shares.

Other equities research analysts have also recently issued research reports about the company. Jefferies Financial Group raised their price objective on Unity Software from $49.00 to $55.00 and gave the stock a “buy” rating in a report on Monday, January 5th. Wedbush lifted their price target on Unity Software from $50.00 to $55.00 and gave the company an “outperform” rating in a report on Tuesday, December 2nd. Citigroup upped their price objective on shares of Unity Software from $50.00 to $52.00 and gave the company a “buy” rating in a research note on Tuesday, November 11th. Freedom Capital raised shares of Unity Software to a “strong-buy” rating in a research report on Thursday, January 15th. Finally, Morgan Stanley boosted their target price on shares of Unity Software from $48.00 to $52.00 and gave the company an “overweight” rating in a report on Tuesday, January 13th. Two research analysts have rated the stock with a Strong Buy rating, thirteen have assigned a Buy rating, seven have issued a Hold rating and two have issued a Sell rating to the company’s stock. According to data from MarketBeat, the stock currently has a consensus rating of “Moderate Buy” and a consensus price target of $44.46.

Insider Buying and Selling at Unity Software

In other news, COO Alexander Blum sold 1,988 shares of the company’s stock in a transaction on Friday, November 28th. The shares were sold at an average price of $42.47, for a total value of $84,430.36. Following the completion of the transaction, the chief operating officer directly owned 561,130 shares in the company, valued at approximately $23,831,191.10. This represents a 0.35% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Also, Director David Helgason sold 8,347 shares of the firm’s stock in a transaction on Thursday, December 11th. The shares were sold at an average price of $49.16, for a total transaction of $410,338.52. Following the sale, the director directly owned 7,635 shares of the company’s stock, valued at approximately $375,336.60. The trade was a 52.23% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. In the last quarter, insiders sold 1,338,021 shares of company stock worth $63,138,575. Insiders own 3.61% of the company’s stock.

Key Unity Software News

Here are the key news stories impacting Unity Software this week:

• Positive Sentiment: Q4 beat on revenue and profitability; company showed improved cash generation (Q4 revenue ~$503.1M, EPS $0.24, strong free cash flow and adjusted EBITDA). These results support the view of an operational turnaround. BusinessWire: Q4 Results
• Positive Sentiment: Momentum in Vector (AI-powered ad/product platform) and Create was highlighted by management as the growth driver; Vector showed strong sequential growth and management expects material ramp this year — a constructive long-term catalyst if adoption continues. Yahoo: Q4 Earnings Highlights
• Positive Sentiment: Sell-side conviction remains mixed but includes bullish takes: Oppenheimer upgraded to outperform ($38 PT) and Needham reaffirmed buy with a $50 PT — indicating some analysts see substantial upside if the transition succeeds. Yahoo: Oppenheimer Upgrade
• Neutral Sentiment: Full earnings/call detail is available (transcript and replay) — useful for investors who want management color on the IronSource wind‑down, Vector metrics and timing of revenue re-acceleration. Seeking Alpha: Earnings Call Transcript
• Neutral Sentiment: Corporate governance update: Bernard Kim was added to the board — a standard board refresh item investors may view as incremental. FinanzNachrichten: Board Appointment
• Negative Sentiment: Guidance miss: Unity guided Q1 revenue $480M–$490M, below the ~$492M–$494M consensus. The below‑consensus outlook was the primary trigger for heavy selling and concern about near‑term demand. Reuters: Downbeat Forecast
• Negative Sentiment: Management is intentionally shutting down legacy, lower‑margin ad inventory (IronSource) to accelerate migration to Vector — that creates a temporary revenue “air pocket,” amplifying near‑term headline weakness and investor anxiety. MarketWatch: AI Displacement Fears
• Negative Sentiment: Analyst and sentiment moves: some firms cut targets (e.g., UBS lowered PT to $32) and commentators flagged AI exposure and execution risk — contributing to the large volume sell‑off and oversold technicals. Benzinga: Analyst/Target Moves

Institutional Investors Weigh In On Unity Software

Hedge funds and other institutional investors have recently modified their holdings of the stock. Root Financial Partners LLC bought a new position in shares of Unity Software during the third quarter worth about $27,000. Atlantic Union Bankshares Corp acquired a new stake in Unity Software during the second quarter valued at approximately $28,000. REAP Financial Group LLC bought a new position in Unity Software during the 4th quarter worth approximately $28,000. Larson Financial Group LLC grew its position in shares of Unity Software by 88.1% in the 3rd quarter. Larson Financial Group LLC now owns 728 shares of the company’s stock worth $29,000 after acquiring an additional 341 shares in the last quarter. Finally, V Square Quantitative Management LLC bought a new stake in shares of Unity Software in the 4th quarter valued at approximately $30,000. Institutional investors own 73.46% of the company’s stock.

Unity Software Stock Performance

The company has a 50-day moving average of $41.22 and a 200-day moving average of $39.83. The firm has a market capitalization of $9.17 billion, a price-to-earnings ratio of -20.41, a price-to-earnings-growth ratio of 30.46 and a beta of 2.04. The company has a current ratio of 2.78, a quick ratio of 2.78 and a debt-to-equity ratio of 0.70.

Unity Software (NYSE:U) last released its 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. Unity Software had a negative net margin of 24.15% and a negative return on equity of 9.45%. The firm had revenue of $503.09 million during the quarter, compared to analyst estimates of $490.64 million. During the same quarter in the previous year, the firm earned ($0.30) earnings per share. The firm’s revenue for the quarter was up 10.1% compared to the same quarter last year. On average, equities research analysts forecast that Unity Software Inc. will post -1.25 earnings per share for the current fiscal year.

Unity Software Company Profile

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.