Unity Software (NYSE:U) - Share price, News & Analysis

U fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	2/6
Past Performance	0/6
Financial Health	5/6
Dividends	0/6

U Stock Overview

Unity Software Inc. creates and operates an interactive real-time 3D content platform.

Rewards

Trading at 65.4% below our estimate of its fair value

Revenue is forecast to grow 24.59% per year

Risk Analysis

Highly volatile share price over the past 3 months

Currently unprofitable and not forecast to become profitable over the next 3 years

Significant insider selling over the past 3 months

Shareholders have been diluted in the past year

Unity Software Competitors

Adobe

NasdaqGS:ADBE

US$188.2b

Autodesk

NasdaqGS:ADSK

US$39.1b

ANSYS

NasdaqGS:ANSS

US$21.6b

AppLovin

NasdaqGS:APP

US$12.5b

Price History & Performance

Summary of all time highs, changes and price drops for Unity Software
Historical stock prices
Current Share Price	US$35.22
52 Week High	US$210.00
52 Week Low	US$29.09
Beta	0
1 Month Change	-53.47%
3 Month Change	-62.60%
1 Year Change	-63.04%
3 Year Change	n/a
5 Year Change	n/a
Change since IPO	-48.47%

Recent News & Updates

May 25

Unity Software Stock: Priced Too Low For The Long-Term Opportunity

Unity previously guided for revenue growth of 36% for full year 2022, which would put the company as the leader in ad-tech growth and mid-range for cloud. Unity is a game engine where more than 2.8 billion monthly active users (MAUs) play games or apps built on Unity compared to Facebook’s 2.9 billion monthly active users. Unity Software's future growth opportunities extend beyond gaming to include industrial real-time 3D and the Metaverse.

May 11

Unity's (NYSE:U) Set Q2 Revenue Outlook 20% Below Expectations - Recent Insider Transactions are not Helpful with Investor Sentiment

As investors are wondering why the stock is dropping after the earnings call, Unity's (NYSE:U) management will have a harder time convincing them to stay on-board. Today we will review the earnings results, and take a look at the history of insider transactions.

Shareholder Returns

	U	US Software	US Market
7D	-8.2%	-3.3%	-4.0%
1Y	-63.0%	-15.5%	-13.2%

Return vs Industry: U underperformed the US Software industry which returned -13.6% over the past year.

Return vs Market: U underperformed the US Market which returned -12.3% over the past year.

Price Volatility

Is U's price volatile compared to industry and market?
U volatility
U Average Weekly Movement	17.2%
Software Industry Average Movement	10.9%
Market Average Movement	7.8%
10% most volatile stocks in US Market	16.8%
10% least volatile stocks in US Market	2.9%

Stable Share Price: U is more volatile than 90% of US stocks over the past 3 months, typically moving +/- 17% a week.

Volatility Over Time: U's weekly volatility has increased from 11% to 17% over the past year.

About the Company

Founded	Employees	CEO	Website
2004	5,864	John Riccitiello	https://unity.com

Unity Software Inc. creates and operates an interactive real-time 3D content 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 serves content creators and developers, artists, designers, engineers, and architects to create interactive and real-time 2D and 3D content.

Unity Software Fundamentals Summary

How do Unity Software's earnings and revenue compare to its market cap?
U fundamental statistics
Market Cap	US$10.43b
Earnings (TTM)	-US$602.70m
Revenue (TTM)	US$1.20b

8.7x

P/S Ratio

-17.3x

P/E Ratio

Is U overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
U income statement (TTM)
Revenue	US$1.20b
Cost of Revenue	US$284.67m
Gross Profit	US$911.21m
Other Expenses	US$1.51b
Earnings	-US$602.70m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	-2.04
Gross Margin	76.20%
Net Profit Margin	-50.40%
Debt/Equity Ratio	72.1%

How did U perform over the long term?

See historical performance and comparison

Valuation

Is Unity Software undervalued compared to its fair value and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

>50%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: U ($35.22) is trading below our estimate of fair value ($101.88)

Significantly Below Fair Value: U is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: U is unprofitable, so we can't compare its Price-To-Earnings Ratio to the US Software industry average.

PE vs Market: U is unprofitable, so we can't compare its Price-To-Earnings Ratio to the US market.

Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate U's PEG Ratio to determine if it is good value.

Price to Book Ratio

PB vs Industry: U is overvalued based on its Price-To-Book Ratio (4.4x) compared to the US Software industry average (3.6x).

Future Growth

How is Unity Software forecast to perform in the next 1 to 3 years based on estimates from 18 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

20.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: U is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: U is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: U is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: U's revenue (24.6% per year) is forecast to grow faster than the US market (7.8% per year).

High Growth Revenue: U's revenue (24.6% per year) is forecast to grow faster than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: U is forecast to be unprofitable in 3 years.

Past Performance

How has Unity Software performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-38.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: U is currently unprofitable.

Growing Profit Margin: U is currently unprofitable.

Past Earnings Growth Analysis

Earnings Trend: U is unprofitable, and losses have increased over the past 5 years at a rate of 38.4% per year.

Accelerating Growth: Unable to compare U's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: U is unprofitable, making it difficult to compare its past year earnings growth to the Software industry (27.1%).

Return on Equity

High ROE: U has a negative Return on Equity (-25.52%), as it is currently unprofitable.

Financial Health

How is Unity Software's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Stable Cash Runway
Forecast Cash Runway

Financial Position Analysis

Short Term Liabilities: U's short term assets ($2.2B) exceed its short term liabilities ($630.3M).

Long Term Liabilities: U's short term assets ($2.2B) exceed its long term liabilities ($2.0B).

Debt to Equity History and Analysis

Debt Level: U has more cash than its total debt.

Reducing Debt: Insufficient data to determine if U's debt to equity ratio has reduced over the past 5 years.

Balance Sheet

Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable U has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: U is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 19.1% per year.

Dividend

What is Unity Software current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate U's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate U's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if U's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if U's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as U has not reported any payouts.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

2.3yrs

Average management tenure

CEO

John Riccitiello (61 yo)

7.58yrs

Tenure

US$12,501,471

Compensation

Mr. John S. Riccitiello has been Chief Executive Officer and President of Unity Software Inc. (formerly known as Unity Technologies, Inc.). since October 2014. Mr. Riccitiello served as the Chief Executive...

CEO Compensation Analysis

Compensation vs Market: John's total compensation ($USD12.50M) is about average for companies of similar size in the US market ($USD13.26M).

Compensation vs Earnings: John's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: U's management team is considered experienced (2.3 years average tenure).

Board Members

Experienced Board: U's board of directors are considered experienced (4.8 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: U insiders have only sold shares in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 5.9%.

Data	Last Updated (UTC time)
Company Analysis	2022/05/24 00:00
End of Day Share Price	2022/05/24 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31