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Unity Software Inc. (U) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
·2-min read

Unity Software Inc. (U) closed the most recent trading day at $31.57, moving +0.67% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.4%. At the same time, the Dow added 0.33%, and the tech-heavy Nasdaq lost 1.1%.

Coming into today, shares of the company had gained 6.34% in the past month. In that same time, the Computer and Technology sector lost 0.9%, while the S&P 500 lost 0.01%.

Unity Software Inc. will be looking to display strength as it nears its next earnings release, which is expected to be February 22, 2023. On that day, Unity Software Inc. is projected to report earnings of $0.01 per share, which would represent year-over-year growth of 120%. Meanwhile, our latest consensus estimate is calling for revenue of $434.24 million, up 37.48% from the prior-year quarter.

It is also important to note the recent changes to analyst estimates for Unity Software Inc.These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

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Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Unity Software Inc. currently has a Zacks Rank of #4 (Sell).

Valuation is also important, so investors should note that Unity Software Inc. has a Forward P/E ratio of 124.2 right now. For comparison, its industry has an average Forward P/E of 41.4, which means Unity Software Inc. is trading at a premium to the group.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 35, putting it in the top 14% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow U in the coming trading sessions, be sure to utilize Zacks.com.

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Unity Software Inc. (U) : Free Stock Analysis Report

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