Are You Looking To Buy Unity Software Inc. (U)? First, Read This

Unity Software Inc. (NYSE:U) finished Wednesday with a subtraction of -$1.48 to close at $137.76, a downside of -1.06 percent. An average of 1,827,400 shares of common stock have been traded in the last five days. There was a gain of $7.38 in the past week. The last 20 days have seen an average of 3,292,940 shares traded, while the 50-day average volume stands at 3,373,182.

U stock has increased by 4.58% in the last month. The company shares reached their 1-month lowest point of $118.31 on 10/04/21. With the stock rallying to its 52-week high on 01/25/21, shares of the company touched a low of $76.00 and a high of $174.94 in 52 weeks. In spite of this, the price is down -21.25% from the 52-week high.


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Insider Transactions

3 days have passed since Unity Software Inc. (U) last reported insider trading activity. Keene Ruth Ann, who is SVP, CLO & GC & Corp Sec’y, most recently acquired $7,000 shares at $136.89 per share on Oct 11. In this transaction, the insider spent $958,233. SVP & GM, Consumer, Downie Clive, disposed of 33,333 shares at a price of $125.60 on Oct 05. The insider now owns more than $4,186,523 worth of shares. Prior to that, President and CEO RICCITIELLO JOHN S. went on to Sale 12,248 shares at $125.41 each on Oct 01. An amount of $1,536,025 was transacted.

Valuation Metrics

Unity Software Inc. (U) has a trailing price-to-earnings (P/E) ratio of 29.20 for the broader industry and 37.24 for the sector. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 41.83, the price-to-book (PB) ratio at 19.60.

The quick ratio of Unity Software Inc. for the three months ended June 29 was 3.60, and the current ratio was 3.60, indicating that the company is able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 0.00 and a total debt to equity ratio of 0.00 for the quarter ending June 29. Unity Software Inc.’s EBITDA margin for the year ending June 29 is -29.48%, while its operating margin for the same period stands at -51.90%. Its gross profit as reported stood at $600.1 million compared to revenue of $772.45 million.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, Unity Software Inc.’s return on assets was -18.30%. For the broader industry, ROE averaged 3.34 over the past year.

Earnings Surprise

For the three-month period that ended June 29, Unity Software Inc. had $587.08 million in cash. In the quarter under review, the net income was up than the previous quarter. The company posted a net income of $273.56 million in the quarter, while revenues of $234.77 million were grew 100.0%. The analyst consensus anticipated Unity Software Inc.’s latest quarter earnings to come in at -$0.13 per share, but it turned out to be -$0.02, a 84.60% surprise. For the quarter, EBITDA amounted to -$136.91 million. Shareholders own equity worth $282.52 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at Unity Software Inc. (U) price momentum. RSI 9-day as of the close on 13 October was 59.84%, suggesting the stock is Neutral, with historical volatility in this time frame at 50.02%.

As of today, U’s price is $137.00 +5.66% or $7.38 from its 5-day moving average. U is currently trading +4.34% higher than its 20-day SMA and +47.26% higher than its 100-day SMA. However, the stock’s current price level is +30.95% above the SMA50 and -11.94% below the SMA200.

The stochastic %K and %D were 75.11% and 71.25%, respectively, and the average true range (ATR) was 5.50. With the 14-day stochastic at 79.52% and the average true range at 5.57, the RSI (14) stands at 57.94%. The stock has reached 5.40 on the 9-day MACD Oscillator while the 14-day reading was at 5.49.

Analyst Ratings

Macquarie launched coverage on Unity Software Inc. (NYSE: U) in its analyst report released on August 31, 2021. The firm assigned the stock a an Outperform rating.The consensus rating for Unity Software Inc. (U) among analysts is Overweight. According to current brokerage recommendations, 1 brokerage firm advise that investors sell U, while 2 suggest investors hold. There are 0 analysts who rate the stock as underweight. The stock is rated overweight by 0 analysts, while 10 others rate it as a “buy”.

What is U’s price target for the next 12 months?

Analysts predict a range of price targets between $85.00 and $170.00, with a median target of $140.00. Taking a look at these predictions, the average price target given by analysts for Unity Software Inc. (U) stock is $134.42.

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