Unity Software (NYSE:U) Shares Gap Down After Analyst Downgrade

Unity Software Inc. (NYSE:U) shares gapped down before the market opened on Wednesday after UBS Group lowered their price target on the stock from $46.00 to $32.00. The stock had previously closed at $29.06, but opened at $21.41. UBS Group currently has a neutral rating on the stock. Unity Software shares last traded at $19.3670, with a volume of 39,431,631 shares changing hands.

Other research analysts have also issued reports about the stock. Wedbush upped their target price on shares of Unity Software from $50.00 to $55.00 and gave the company an “outperform” rating in a report on Tuesday, December 2nd. Jefferies Financial Group upped their price objective on shares of Unity Software from $49.00 to $55.00 and gave the company a “buy” rating in a research note on Monday, January 5th. Barclays raised their target price on shares of Unity Software from $30.00 to $35.00 and gave the stock an “equal weight” rating in a research report on Thursday, November 6th. Weiss Ratings reiterated a “sell (d-)” rating on shares of Unity Software in a report on Wednesday, January 21st. Finally, The Goldman Sachs Group increased their price target on Unity Software from $42.00 to $47.00 and gave the stock a “neutral” rating in a research note on Tuesday, January 13th. Two analysts have rated the stock with a Strong Buy rating, thirteen have issued a Buy rating, seven have issued a Hold rating and two have issued a Sell rating to the stock. Based on data from MarketBeat.com, Unity Software presently has a consensus rating of “Moderate Buy” and a consensus target price of $44.46.

Insider Transactions at Unity Software

In other news, COO Alexander Blum sold 40,693 shares of the firm’s stock in a transaction dated Tuesday, November 25th. The stock was sold at an average price of $41.38, for a total value of $1,683,876.34. Following the transaction, the chief operating officer directly owned 563,118 shares in the company, valued at $23,301,822.84. This trade represents a 6.74% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, Director David Helgason sold 393,312 shares of Unity Software stock in a transaction dated Thursday, December 11th. The shares were sold at an average price of $49.64, for a total value of $19,524,007.68. Following the completion of the transaction, the director directly owned 5,439,173 shares in the company, valued at $270,000,547.72. This represents a 6.74% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders have sold 1,338,021 shares of company stock valued at $63,138,575 in the last ninety days. Company insiders own 3.61% of the company’s stock.

Trending Headlines about Unity Software

Here are the key news stories impacting Unity Software this week:

• Positive Sentiment: Q4 beat: Unity reported $0.24 EPS vs. a $0.20 consensus and revenue of $503.1M (up 10.1% YoY), surprising on the upside and improving from a loss a year ago. This is the primary near-term bullish driver. Zacks: Q4 beat
• Positive Sentiment: Product momentum cited by management: management flagged strong performance from Vector (third consecutive quarter of mid‑teen sequential growth) and Create subscription strength — a positive signal for sustainable revenue. BusinessWire: Q4 results
• Positive Sentiment: Analyst upgrades and bullish price targets: Oppenheimer upgraded U to “outperform” with a $38 target, and Needham reaffirmed a “buy” with a $50 target — both add buy-side momentum and coverage support. Oppenheimer upgrade Needham note
• Positive Sentiment: Bullish options activity: unusually large call buying (≈75,900 calls) indicates speculative/institutional bullish interest that can amplify intraday moves.
• Neutral Sentiment: Board addition: Unity appointed Bernard Kim to its board, a governance/strategic development that may aid partnerships and execution but is not an immediate revenue driver. Board appointment
• Negative Sentiment: Q1 revenue guide slightly light: Unity guided Q1 revenue to $480–$490M vs. a $491.8M consensus — a mild miss that tempers the beat and can pressure the stock if investors focus on near‑term growth.
• Negative Sentiment: Analyst pushback: UBS cut its target from $46 to $32 and holds a “neutral” view, reducing some of the upside narrative. UBS note
• Negative Sentiment: Macro/AI skepticism and profitability risk: public commentary (e.g., Jim Cramer) that Unity could be hurt by AI plus continued negative net margin and ROE remind investors the company must maintain execution while scaling. Cramer comment

Institutional Investors Weigh In On Unity Software

Several institutional investors have recently bought and sold shares of the business. Harvest Fund Management Co. Ltd increased its position in shares of Unity Software by 114.0% in the fourth quarter. Harvest Fund Management Co. Ltd now owns 9,331 shares of the company’s stock worth $412,000 after acquiring an additional 4,971 shares in the last quarter. Vise Technologies Inc. purchased a new stake in Unity Software during the 4th quarter worth $269,000. Daiwa Securities Group Inc. increased its holdings in Unity Software by 58.6% in the 4th quarter. Daiwa Securities Group Inc. now owns 92,588 shares of the company’s stock valued at $4,089,000 after purchasing an additional 34,204 shares in the last quarter. Cibc World Market Inc. raised its position in Unity Software by 7.7% in the fourth quarter. Cibc World Market Inc. now owns 6,974 shares of the company’s stock valued at $308,000 after purchasing an additional 496 shares during the period. Finally, TD Asset Management Inc lifted its stake in shares of Unity Software by 40.2% during the fourth quarter. TD Asset Management Inc now owns 337,696 shares of the company’s stock worth $14,916,000 after purchasing an additional 96,800 shares in the last quarter. 73.46% of the stock is currently owned by hedge funds and other institutional investors.

Unity Software Stock Performance

The stock has a 50 day simple moving average of $41.68 and a 200 day simple moving average of $39.96. The company has a quick ratio of 2.78, a current ratio of 2.78 and a debt-to-equity ratio of 0.70. The company has a market cap of $8.42 billion, a price-to-earnings ratio of -18.50, a PEG ratio of 28.86 and a beta of 2.04.

Unity Software (NYSE:U) last announced its earnings results on Wednesday, February 11th. The company reported $0.24 EPS for the quarter, beating the consensus estimate of $0.20 by $0.04. The business had revenue of $503.09 million for the quarter, compared to the consensus estimate of $490.64 million. Unity Software had a negative return on equity of 9.45% and a negative net margin of 24.15%.The company’s revenue was up 10.1% on a year-over-year basis. During the same period last year, the business posted ($0.30) EPS. As a group, analysts predict that Unity Software Inc. will post -1.25 EPS for the current year.

About Unity Software

Unity Software is a leading provider of a real-time 3D development platform that enables creators across industries to design, build and operate interactive, real-time experiences. Originally focused on the game development market, Unity’s technology now extends into sectors such as film, automotive, architecture, engineering and construction, delivering immersive content for mobile, desktop, console, augmented reality and virtual reality devices. The company’s core offering comprises a suite of authoring tools, runtime engines and cloud services that streamline the creation and deployment of interactive 3D applications.

The Unity Editor serves as the central hub where developers design scenes, script behavior and iterate on assets.