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U: New Ecosystem Partnerships And Commerce Tools Will Support Balanced Risk And Reward

U: Upskilling Initiatives And Expanded Device Support Will Shape Future Prospects

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AnalystConsensusTarget
Not Invested
Published 20 Mar 2025

Update shared on 14 Dec 2025

Fair value Increased 4.40%
Previous
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AnalystConsensusTarget's Fair Value
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1Y
88.9%
7D
0.8%

Analysts have nudged their price target on Unity Software higher to approximately 45.63 dollars from about 43.70 dollars. This reflects expectations for stronger revenue growth despite sharply compressed profit margin forecasts and a materially higher assumed future earnings multiple.

What's in the News

  • Unity and Epic Games are partnering to let developers publish Unity games into Fortnite, while also adding Unreal Engine support to Unity's cross-platform commerce tools to give developers more flexibility in managing catalogs, payments, and live operations (company event).
  • Unity issued fourth quarter 2025 guidance, projecting revenue of 480 million to 490 million dollars, with mid single digit sequential growth in the Grow segment and high single digit year over year growth in Create, excluding non strategic revenue (company guidance).
  • Unity introduced a major commerce enhancement to its engine, enabling developers to manage global catalogs, payment providers, pricing, and promotions from a single dashboard across mobile, web, and PC, now in limited early access with select partners (product announcement).
  • Unity 6 added general availability of Android XR support, allowing developers to port existing Unity titles to devices like Galaxy XR and expand into new immersive experiences across gaming, education, entertainment, and enterprise (product announcement).

Valuation Changes

  • Fair Value Estimate has risen modestly, increasing from approximately 43.70 dollars to about 45.63 dollars per share.
  • Discount Rate is essentially unchanged, ticking up slightly from about 8.77 percent to roughly 8.77 percent.
  • Revenue Growth Forecast has increased, moving from around 11.99 percent to approximately 13.16 percent.
  • Net Profit Margin Expectation has fallen sharply, declining from about 12.41 percent to roughly 1.0 percent.
  • Future P/E Multiple Assumption has risen dramatically, expanding from about 87.1 times to roughly 1112.1 times forward earnings.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.