The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on August 6. On the other hand, if they miss, the stock may move lower. While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise. Zacks Consensus Estimate This company is expec ...

Company Performance - Unity Software Inc. closed at $35.92, reflecting a -2.26% change from the previous day, underperforming the S&P 500's gain of 0.14% [1] - Over the past month, Unity's shares have appreciated by 59.3%, significantly outperforming the Computer and Technology sector's gain of 7.37% and the S&P 500's gain of 5.35% [1] Upcoming Earnings Report - Unity is scheduled to release its earnings on August 6, 2025, with a forecasted EPS of -$0.25, representing a 21.88% increase from the same quarter last year [2] - The consensus estimate anticipates revenue of $425.83 million, indicating a 5.21% decrease from the same quarter last year [2] Annual Forecast - For the entire year, the Zacks Consensus Estimates predict an EPS of -$0.8 and revenue of $1.79 billion, reflecting changes of +52.38% and -1.02% respectively compared to the previous year [3] - Recent adjustments to analyst estimates for Unity are noted, with positive revisions indicating a favorable business outlook [3] Analyst Ratings and Industry Rank - The Zacks Rank system, which assesses estimate revisions, currently ranks Unity Software Inc. as 2 (Buy), with a 1.85% increase in the consensus EPS estimate over the last 30 days [5] - The Internet - Software industry, part of the Computer and Technology sector, holds a Zacks Industry Rank of 79, placing it in the top 32% of over 250 industries [6]

Group 1: Reddit - Reddit has shown strong revenue growth post-IPO, with Q1 ad revenue increasing by 61% to $359 million and daily active unique users rising 31% year-over-year to 108 million [3][4] - The company is introducing new AI-powered ad tools to enhance advertising demand, providing marketers with real-time insights into discussions on its platform [4] - Reddit's AI features, such as Reddit Answers, have gained traction, reaching 1 million weekly users in Q1, and the company is monetizing its valuable data by licensing it to AI firms [5] - Despite a 50% rebound from recent lows, Reddit's stock is still 36% below its all-time high, with analysts projecting a 51% year-over-year revenue growth for Q2 [6][7] Group 2: Unity Software - Unity is a leading game engine provider, experiencing significant growth with over 20% quarterly revenue growth until recently, but its stock has fallen 86% from previous highs due to high valuation and declining revenue [9][10] - The company is undergoing a "portfolio reset," which led to a 6% year-over-year revenue decline last quarter, but management's focus on high-growth and high-margin opportunities may unlock Unity's potential [11] - Unity has migrated its advertising business to the AI-powered Unity Vector platform, which is expected to enhance advertising results and drive long-term growth in its Grow Solutions segment [12] - The Create Solutions segment saw an 8% year-over-year revenue decline, but upcoming updates to Unity 6, including AI features, could stimulate demand for its software [13][14] - Analysts expect Unity's revenue to decline 2% in 2025 before growing 9% to $1.9 billion in 2026, with adjusted earnings per share projected to reach $2.34 by 2029 [15] - The stock is currently trading at 13 times 2029 earnings estimates, indicating potential for significant price appreciation [16]

Core Insights - Unity Software's stock experienced a significant increase of over 14%, reaching a new 52-week high, driven by a trading volume of nearly 40 million shares, which is more than three times its daily average [1][2] - The positive market reaction is attributed to an analyst at Jefferies raising the stock's price target to $35 and maintaining a Buy rating, indicating a shift in investor perception towards Unity [2][3] - The company's turnaround narrative is evolving, with a focus on the successful implementation of its strategy under new leadership [3] Advertising Business Momentum - The renewed confidence in Unity is primarily due to the accelerating performance of its Grow Solutions segment, which aids game developers in attracting players and monetizing their creations [4] - Unity Vector, the new AI-powered advertising platform, has shown a significant performance lift of 15-20% for advertisers, enhancing the platform's attractiveness [5][6] - The launch of the Unity Audience Hub in June 2025, supported by partnerships with Experian and Roku, aims to create targeted ad campaigns and expand into the Connected TV (CTV) advertising space [6][8] Financial and Operational Stability - Unity's core Create Solutions business is showing strong performance, with double-digit revenue growth from high-margin subscriptions, indicating a solid financial foundation [10] - The company's strategic portfolio reset is yielding positive results, as evidenced by improvements highlighted in its first-quarter financial report [11] - Unity's net loss under GAAP decreased to $78 million from $291 million year-over-year, and the company generated $7 million in free cash flow, reversing a previous cash burn [14] Future Outlook - The combination of a revitalized advertising business, a stable core engine, and disciplined financial management positions Unity for potential revenue growth in the latter half of 2025 [12][13] - The next significant milestone for Unity will be the second-quarter earnings report, which will assess whether the operational momentum can translate into improved financial performance [15] - Overall, Unity's narrative is shifting from a turnaround phase to one focused on execution and long-term growth potential [16]

Group 1: Momentum Investing Overview - Momentum investing involves following a stock's recent trend, with the strategy of buying high and hoping to sell even higher [1] - The Zacks Momentum Style Score helps investors identify which metrics are effective for assessing momentum in stocks [2] Group 2: Unity Software Inc. Performance - Unity Software Inc. currently has a Momentum Style Score of A and a Zacks Rank of 2 (Buy) [3][4] - Over the past week, Unity's shares increased by 10.72%, while the Zacks Internet - Software industry declined by 2.73% [6] - In the last quarter, Unity's shares rose by 63.69%, and over the past year, they gained 123.09%, compared to the S&P 500's increases of 19.7% and 14.09% respectively [7] Group 3: Trading Volume and Earnings Outlook - Unity's average 20-day trading volume is 14,861,725 shares, indicating a bullish sign with rising stock prices [8] - In the past two months, one earnings estimate for Unity moved higher, increasing the consensus estimate from -$0.90 to -$0.80 [10] - For the next fiscal year, one estimate has also moved upwards, with no downward revisions during the same period [10] Group 4: Conclusion - Given the strong performance metrics and positive earnings outlook, Unity Software Inc. is positioned as a promising investment opportunity [12]

Core Viewpoint - The AI application software sector in the US stock market has seen significant gains, particularly with Unity Software experiencing a rise of over 13%, reaching its highest point in over a year and a half, and accumulating nearly 60% growth within the month [1] Company Performance - Unity Software's stock surged more than 13%, marking a new high not seen in over 18 months [1] - The month-to-date increase for Unity Software is close to 60% [1] - SoundHound AI's stock rose over 7% [1] - AppLovin and Tempus AI both saw stock increases of nearly 3% [1]

Core Viewpoint - Unity Software's stock price target has been raised by Jefferies analyst Brent Thill to $35, reflecting a more than 20% increase, with a buy recommendation reiterated [1][3] Group 1: Market Insights - Jefferies' survey indicates that overall ad spend expectations for 2025 have improved, now projected to grow nearly 4% year-over-year [3] - Unity's market share in mobile game advertising is growing, which is viewed as incrementally positive, prompting an increase in earnings estimates [3] Group 2: Financial Performance - Unity has generated substantial positive free cash flow of $308 million over the last 12 months, despite being unprofitable under GAAP [4] - The current valuation of Unity's stock stands at a 45x price-to-free-cash-flow based on its $14 billion market capitalization [4] Group 3: Growth Projections - Analysts forecast that Unity's free cash flow will more than triple to nearly $1 billion by 2030, which could justify the current stock valuation [5] - The projected growth rate of free cash flow from $308 million to just under $1 billion over five years translates to a 26% annualized growth rate [6]

Core Insights - The article promotes Ian's Insider Corner, which offers access to investment reports, trade alerts, and a chat room for members [1] Group 1 - Ian Bezek has a decade of experience as a hedge fund analyst and has conducted extensive research in Latin American markets, focusing on countries like Mexico, Colombia, and Chile [2] - The investment strategy emphasizes high-quality compounders and growth stocks available at reasonable prices in the US and developed markets [2]

Group 1 - Michael Wiggins De Oliveira is an inflection investor, focusing on buying undervalued companies at pivotal moments when their profitability is expected to improve significantly over the next year [1] - The investment strategy emphasizes technology and the Great Energy Transition, including uranium, with a concentrated portfolio of approximately 15 to 20 stocks and an average holding period of 18 months [1] - Michael has over 10 years of experience analyzing companies in tech and energy sectors, and has built a following of over 40,000 on Seeking Alpha [2] Group 2 - The Investing Group Deep Value Returns, led by Michael, offers insights through its concentrated portfolio of value stocks, timely updates on stock picks, and a weekly webinar for live advice [3] - The group provides "hand-holding" support for both new and experienced investors, fostering an active and kind community accessible via chat [3]

Group 1 - Unity Software Inc. shares increased by 6.6% to close at $27.86, supported by strong trading volume, compared to a 4% gain over the past four weeks [1] - The company is experiencing growth due to its AI-powered ad platform Unity Vector, increased adoption of Unity 6, and double-digit subscription revenue growth, while focusing on high-margin services for profitable expansion [2] - The expected quarterly loss is $0.26 per share, reflecting an 18.8% year-over-year change, with revenues projected at $425.02 million, down 5.4% from the previous year [2] Group 2 - The consensus EPS estimate for Unity Software has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without earnings estimate revisions [4] - Unity Software holds a Zacks Rank of 2 (Buy), while another company in the same industry, nCino, has a Zacks Rank of 1 (Strong Buy) [4][5] - nCino's consensus EPS estimate is $0.13, representing a 7.1% decrease from the previous year [5]