Update shared on 07 Jan 2026
Fair value Increased 28%Analysts have raised their fair value estimate for Unity Software from about US$23.39 to roughly US$29.94, citing updated assumptions for revenue growth, profitability, the discount rate, and a higher future P/E multiple.
What's in the News
- Unity and Epic Games plan to let developers publish Unity games into Fortnite, which could widen distribution options for creators using Unity tools. (Key Developments)
- Unity is adding Unreal Engine support to its cross-platform commerce platform, giving Unreal developers access to tools for managing digital catalogs, payments, pricing, promotions, and live operations across PC, mobile, and web. (Key Developments)
- Unity issued fourth quarter 2025 revenue guidance of US$480 million to US$490 million, with the Grow segment expected to show mid single digit sequential revenue growth and the Create segment expected to show high single digit year over year growth excluding non strategic revenue. (Key Developments)
- Unity announced a new Unity engine enhancement that lets developers manage global commerce and catalogs from a single dashboard across mobile app stores, web, and PC, with combined payment providers and centralized control over pricing, promotions, and live operations, currently in limited early access. (Key Developments)
- Unity released general availability of Android XR support in Unity 6, enabling developers to bring existing games and apps to Galaxy XR and other Android XR devices, with launch day experiences such as Google Maps XR, NFL Pro Era, and Inside [JOB]. (Key Developments)
Valuation Changes
- Fair Value Estimate moved from about US$23.39 to roughly US$29.94 per share, reflecting the updated model inputs.
- Discount Rate was adjusted slightly from 8.82% to 8.77%, implying a modest change in the required rate of return used in the valuation.
- Revenue Growth was updated from 7.33% to 13.91%, indicating higher assumed top line expansion in the revised forecast.
- Net Profit Margin was revised from 13.09% to 2.29%, pointing to a much lower profitability assumption in the new model.
- Future P/E was reset from 51.0x to a very large multiple of about 307.1x, showing a substantially higher earnings multiple applied to Unity’s projected earnings.
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