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Unity Software (U) to Post Q4 Earnings: What's in the Cards?

Unity Software U is set to report fourth-quarter 2023 results on Feb 26.

The Zacks Consensus Estimate for revenues is pegged at $536.48 million, indicating an increase of 18.96% from the year-ago quarter’s reported figure.

The consensus mark for earnings is pegged at 19 cents per share, which has remained unchanged in the past 30 days.

Unity’s earnings beat the Zacks Consensus Estimate thrice in the trailing four quarters and missed once. It delivered an earnings surprise of 39.17%, on average.

Unity Software Inc. Price and EPS Surprise

Unity Software Inc. Price and EPS Surprise
Unity Software Inc. Price and EPS Surprise

Unity Software Inc. price-eps-surprise | Unity Software Inc. Quote

Factors Likely to Influence Q4 Results

Unity’s fourth-quarter performance is expected to have benefited from increasing demand for its software solutions from content creators like game developers, architects, automotive designers and filmmakers.

In the fourth quarter, the company unveiled a slate of new AI innovations and platform updates to better support game developers.

This includes early access availability to Unity Muse, a suite of AI-powered features to simplify content creation, and a first look at Unity 6, the company’s next major software release coming in the current year (formerly known as 2023 LTS). It also includes the announcement of Unity Cloud, a platform of connected products and services to help developers organize content across projects and pipelines.

The strong adoption of U’s subscription-based Create Solutions and Operate Solutions is likely to have driven top-line growth in the to-be-reported quarter.

Steady demand for interactive, real-time 2D and real-time 3D content for mobile phones, tablets, PCs and virtual reality devices is likely to have aided the company’s top line.

Unity Software has been expanding its platform by introducing new product capabilities. This is likely to have been a major growth driver in customer engagement.

What Our Model Says

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Unity Software has an Earnings ESP of +4.35% and a Zacks Rank #4 (Sell) at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

The Gap GPS has an Earnings ESP of +24.44% and sports a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of The Gap have lost 8.5% year to date. GPS is set to report its fourth-quarter 2023 results on Mar 7.

SEMrush SEMR has an Earnings ESP of +23.08% and a Zacks Rank of 2 at present.

Shares of SEMrush have plunged 12.3% year to date. SEMR is slated to report its fourth-quarter 2023 results on Mar 4.

SentinelOne S has an Earnings ESP of +16.30% and a Zacks Rank #3 at present.

Shares of SentinelOne have lost 6.7% year to date. S is set to report its fourth-quarter fiscal 2024 results on Mar 13.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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