Investment Rating - The report initiates coverage on Unity (U.US) with a "Buy" rating and a target price of $31, indicating a potential upside of 19% from the current price of $26.05 [14][44]. Core Insights - Unity is a leading player in the game engine market, holding approximately 70% market share in mobile games and expanding into industries beyond gaming, such as architecture, automotive, and aerospace, which currently contributes 23% to its Create Solutions revenue [3][33]. - The integration of AI technologies, particularly through the Unity editor, is expected to enhance product competitiveness and drive long-term growth [4][16]. - The company's growth solutions, which include advertising networks and game publishing services, accounted for 61% of revenue in 2023, showcasing a strong network effect and data advantage [15][16]. Summary by Sections Game Engine Market Leadership - Unity dominates the game engine market with a significant presence in mobile gaming, where 70% of the top 1000 mobile games are developed using Unity [10][11]. - The company has a market share of approximately 50% on PC and 40% on consoles, with a 90% share in the AR headset market [10]. AIGC Impact on Content Development - The report suggests that AIGC (AI-Generated Content) will complement traditional content creation tools rather than compete with them, enhancing efficiency in the development process [4][41]. - Unity has integrated AI capabilities into its editor, allowing for proprietary model training and support for third-party AI models, which is expected to benefit the company in the long run [4][41]. Financial Projections - Revenue is projected to grow from $1.39 billion in FY22 to $2.29 billion by FY26, with a notable increase in adjusted EBITDA from -$71 million in FY23 to $758 million by FY26 [9][17]. - The report anticipates a shift towards profitability, with operating losses decreasing from -$882 million in FY22 to -$103 million by FY26 [9][17]. Valuation Analysis - The target price of $31 corresponds to a 6.5x P/S ratio for FY24E, reflecting confidence in Unity's market position and growth potential [16][17]. - The report highlights that Unity's upcoming Unity 6 product is expected to enhance performance and support for new technologies, contributing to revenue growth through the newly introduced Runtime Fee model [30][61]. Business Focus and Strategy - Unity is focusing on core business areas: engine, cloud, and monetization, aiming to achieve the "Rule of 40" by the end of the year, which combines revenue growth and profitability [76]. - The company plans to exit non-strategic businesses that contributed $283 million in revenue, allowing for a more concentrated effort on high-margin SaaS subscriptions and other growth areas [76].

Unity Software Inc. (U) ended the recent trading session at $25.36, demonstrating a +0.16% swing from the preceding day's closing price. The stock lagged the S&P 500's daily gain of 1.11%. On the other hand, the Dow registered a gain of 0.8%, and the technology-centric Nasdaq increased by 1.24%.Shares of the company have depreciated by 7.39% over the course of the past month, underperforming the Computer and Technology sector's gain of 0.85% and the S&P 500's gain of 0.48%.The upcoming earnings release of U ...

The most recent trading session ended with Unity Software Inc. (U) standing at $27.57, reflecting a +1.55% shift from the previouse trading day's closing. This change outpaced the S&P 500's 0.32% gain on the day. Elsewhere, the Dow gained 0.68%, while the tech-heavy Nasdaq added 0.2%.The company's stock has dropped by 11.94% in the past month, falling short of the Computer and Technology sector's gain of 6.04% and the S&P 500's gain of 5.11%.The investment community will be paying close attention to the ear ...

SAN FRANCISCO--(BUSINESS WIRE)--Unity (NYSE: U), the world’s leading platform of tools for creators to build and grow real-time games, apps, and experiences across multiple platforms, released the 2024 Unity Gaming Report today at the Game Developers Conference 2024 (GDC), revealing that while 2023 was a year marked with persisting economic headwinds, game developers are strategically navigating the challenges and successfully adapting to changes in technology, the economy, and player habits by doing more w ...

Unity Software Inc. (U) closed the most recent trading day at $26, moving -0.69% from the previous trading session. The stock trailed the S&P 500, which registered a daily loss of 0.29%. Elsewhere, the Dow lost 0.35%, while the tech-heavy Nasdaq lost 0.3%.Heading into today, shares of the company had lost 25.01% over the past month, lagging the Computer and Technology sector's gain of 3.61% and the S&P 500's gain of 4.42% in that time.The upcoming earnings release of Unity Software Inc. will be of great int ...

Unity Software Inc. (U) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.Over the past month, shares of this company have returned -21.5%, compared to the Zacks S&P 500 composite's +3.2% change. During this period, the Zacks Internet - Software industry, which Unity Software Inc. falls in, has gained 0.6%. The key question now is: What could be the stock's future di ...

Unity Software (U) has announced a groundbreaking partnership with Mazda Motor Corporation (“Mazda”). This collaboration aims to pioneer a next-generation in-cabin car experience, promising a seamless journey for drivers. Mazda's growing efforts toward innovation in the cockpit human-machine interface (HMI) domain align well with U's cutting-edge technology expertise.The partnership with Unity Software marks a significant milestone in Mazda's research and development journey, particularly in enhancing the c ...

TOKYO & SAN FRANCISCO--(BUSINESS WIRE)--Unity (NYSE:U), the world’s leading platform of tools for creators to build and grow real-time games, apps, and experiences across multiple platforms, announced today a new partnership with Mazda Motor Corporation (“Mazda”) to develop a next-generation in-cabin car experience that will deliver a more seamless on-road experience for drivers. The agreement is part of Mazda's research and development efforts for continuous evolution in the cockpit HMI area, and the GUI t ...

Unity Software (U -1.40%) posted its fourth-quarter earnings report on Feb. 26. The gaming software developer's revenue rose 35% year over year to $451 million, which exceeded analysts' expectations by $56 million. However, that figure was significantly inflated by its shutdown of Weta Digital, which resulted in the release of its deferred revenue during the quarter, as well as inorganic gains from its merger with the ad tech company ironSource last November.Excluding those two factors, Unity's revenue fell ...

Shares of tech company Unity Software (U -1.40%) have been on a roller coaster the past year. The stock hit a 52-week high of $50.08 last July before sinking to a low of $22.20 in November. Then shares zoomed past $40 toward the end of 2023, only to drop to around $30 at the time of this writing.These swings might make you wonder if its latest share price drop creates a buy opportunity. The answer is complicated because the company is undergoing substantial changes.To determine if Unity stock is worth buyin ...