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

Unity Software Inc. (NYSE:U) shares gapped down prior to trading on Wednesday after Citigroup lowered their price target on the stock from $52.00 to $43.00. The stock had previously closed at $29.06, but opened at $21.41. Citigroup currently has a buy rating on the stock. Unity Software shares last traded at $19.3670, with a volume of 39,431,631 shares traded.

Several other research firms also recently weighed in on U. Wells Fargo & Company dropped their price target on Unity Software from $54.00 to $38.00 and set an “overweight” rating for the company in a research note on Thursday. Benchmark reissued a “hold” rating on shares of Unity Software in a report on Monday, February 2nd. Wall Street Zen raised shares of Unity Software from a “hold” rating to a “buy” rating in a research note on Saturday, December 6th. Piper Sandler upgraded shares of Unity Software from a “neutral” rating to an “overweight” rating and lifted their price target for the company from $43.00 to $59.00 in a report on Thursday, December 11th. Finally, BTIG Research decreased their price target on shares of Unity Software from $60.00 to $41.00 and set a “buy” rating on the stock in a research note on Thursday. One equities research analyst has rated the stock with a Strong Buy rating, fourteen have given a Buy rating, seven have issued a Hold rating and two have assigned a Sell rating to the company’s stock. According to data from MarketBeat.com, Unity Software currently has an average rating of “Moderate Buy” and a consensus price target of $39.29.

Insider Transactions at Unity Software

In related news, CAO Mark Barrysmith sold 14,407 shares of the stock in a transaction dated Wednesday, December 10th. The shares were sold at an average price of $50.01, for a total value of $720,494.07. Following the completion of the transaction, the chief accounting officer owned 394,479 shares of the company’s stock, valued at approximately $19,727,894.79. This trade represents a 3.52% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, COO Alexander Blum sold 1,988 shares of the business’s stock in a transaction that occurred on Friday, November 28th. The stock was sold at an average price of $42.47, for a total value of $84,430.36. Following the sale, the chief operating officer directly owned 561,130 shares in the company, valued at $23,831,191.10. The trade was a 0.35% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last 90 days, insiders sold 1,338,021 shares of company stock worth $63,138,575. 3.61% of the stock is currently owned by corporate insiders.

Key Headlines Impacting Unity Software

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

• Positive Sentiment: Q4 beat and improving profitability — Unity reported revenue above consensus and positive adjusted EPS with strong free cash flow and adjusted EBITDA margins, signaling the company is now generating cash rather than burning it; management pointed to Vector and Create strength as drivers of near‑term improvement. BusinessWire: Q4 results MarketBeat: Profitability & cash flow analysis
• Positive Sentiment: Product momentum — Unity’s Vector AI platform showed accelerated sequential growth (management highlighted mid‑teen quarterly growth and very strong monthly trends), and Create returned to growth, supporting the case that the revenue mix is shifting toward higher‑margin offerings. MarketBeat: Vector momentum
• Neutral Sentiment: Analysts are re‑forecasting — many firms lowered price targets and adjusted models after the quarter, but several still maintain buy/overweight ratings with material upside vs. the current price, reflecting disagreement on how quickly Vector will replace legacy revenue. Benzinga: analyst updates
• Neutral Sentiment: High-volume capitulation cleared short-term positions — trading volume spiked as investors sold on guidance, which can both exaggerate downside and create a liquidity-driven reset in valuation; this raises short‑term volatility but also a potential entry point for longer-term holders if fundamentals hold. MarketBeat: volume & capitulation
• Negative Sentiment: Weak near‑term guidance — Unity’s Q1 revenue guidance came in below consensus, driven by management’s decision to wind down a lower‑margin legacy advertising product (IronSource) before new Vector revenue fully ramps. That guidance miss sparked the rapid decline as the market focuses on near‑term top‑line risk. Reuters: downbeat forecast
• Negative Sentiment: Negative market reaction and bearish pieces — several outlets and analysts flagged the guidance and AI‑displacement fears as reasons to sell or remain cautious, amplifying downside pressure. Coverage includes bearish takes and articles highlighting the revenue forecast miss. Blockonomi: revenue forecast miss Seeking Alpha: bearish analysis

Hedge Funds Weigh In On Unity Software

Several hedge funds have recently bought and sold shares of the business. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC lifted its position in shares of Unity Software by 5.9% during the first quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 813,176 shares of the company’s stock worth $15,930,000 after purchasing an additional 45,481 shares during the last quarter. Focus Partners Wealth purchased a new stake in Unity Software in the 1st quarter valued at about $260,000. US Bancorp DE boosted its position in Unity Software by 26.4% in the 2nd quarter. US Bancorp DE now owns 33,963 shares of the company’s stock valued at $822,000 after buying an additional 7,103 shares during the period. Callan Family Office LLC bought a new position in Unity Software in the 2nd quarter worth about $305,000. Finally, Vanguard Personalized Indexing Management LLC increased its position in shares of Unity Software by 9.4% during the second quarter. Vanguard Personalized Indexing Management LLC now owns 34,558 shares of the company’s stock worth $836,000 after acquiring an additional 2,962 shares during the period. Institutional investors own 73.46% of the company’s stock.

Unity Software Trading Down 8.5%

The stock’s 50-day moving average price is $40.73 and its 200 day moving average price is $39.69. The company has a debt-to-equity ratio of 0.70, a current ratio of 2.78 and a quick ratio of 2.78. The firm has a market capitalization of $8.38 billion, a PE ratio of -20.41, a price-to-earnings-growth ratio of 19.50 and a beta of 2.04.

Unity Software (NYSE:U) last announced its quarterly earnings data on Wednesday, February 11th. The company reported $0.24 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.20 by $0.04. The company had revenue of $503.09 million for the quarter, compared to analysts’ expectations of $490.64 million. Unity Software had a negative return on equity of 4.78% and a negative net margin of 21.77%.Unity Software’s revenue was up 10.1% compared to the same quarter last year. During the same quarter in the prior year, the firm earned ($0.30) earnings per share. On average, sell-side analysts expect that Unity Software Inc. will post -1.25 EPS for the current fiscal year.

Unity Software Company Profile

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.