Unity Software Inc. (U) experienced a significant drop of 4.49%, hitting a 20-day low. This decline comes as the Nasdaq-100 and S&P 500 indices also fell by 0.96% and 0.52%, respectively, indicating a broader market weakness.
Despite the stock's decline, Unity's options volume surged to 61,936 contracts, reflecting strong investor expectations for future performance. Notably, the $55 strike call option expiring on February 20, 2026, saw substantial trading activity, suggesting heightened market confidence in Unity's potential price appreciation.
The increase in options trading could indicate that investors are positioning themselves for a rebound, despite the current market conditions. This activity may lead to increased volatility in Unity's stock as investors react to market movements.
Wall Street analysts forecast U stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for U is 48.71 USD with a low forecast of 21.00 USD and a high forecast of 60.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
20 Analyst Rating
Wall Street analysts forecast U stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for U is 48.71 USD with a low forecast of 21.00 USD and a high forecast of 60.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
13 Buy
6 Hold
1 Sell
Moderate Buy
Current: 40.160
Low
21.00
Averages
48.71
High
60.00
Current: 40.160
Low
21.00
Averages
48.71
High
60.00
BofA
Underperform
downgrade
$21 -> $18
2026-01-26
New
Reason
BofA
Price Target
$21 -> $18
AI Analysis
2026-01-26
New
downgrade
Underperform
Reason
BofA lowered the firm's price target on Unity (U) to $18 from $21 and keeps an Underperform rating on the shares. Trading at a meaningful premium to large-scale online ad stocks and AppLovin (APP), the firm thinks Unity is "priced for perfection," the analyst tells investors in a Q4 preview. The firm sees significant de-rating risk at the first sign of Vector's growth deceleration and reiterates an Underperform rating as it argues that "the balance of risk appears asymmetric to the downside."
Wells Fargo
Overweight
maintain
$51 -> $54
2026-01-08
Reason
Wells Fargo
Price Target
$51 -> $54
2026-01-08
maintain
Overweight
Reason
Wells Fargo raised the firm's price target on Unity to $54 from $51 and keeps an Overweight rating on the shares. The firm says its Q4 mobile game developer / publisher ad checks were broadly positive on category growth and continued to indicate year-over-year share gains for the Unity Ad Network, driven by Vector. As a result, Wells now assumes Q4 Unity Ad Network revenues positive 15% quarter-over-quarter. Better Unity Ad Network trends are offset by persistent challenges at Ironsource, cutting Q4 to negative 5% quarter-over-quarter, the firm adds.
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Jefferies
Buy
maintain
$49 -> $55
2026-01-05
Reason
Jefferies
Price Target
$49 -> $55
2026-01-05
maintain
Buy
Reason
Jefferies raised the firm's price target on Unity to $55 from $49 and keeps a Buy rating on the shares. The firm believes 2026 will be "another year of gradual AI monetization," but thinks more meaningful growth contribution and acceleration are needed to ease AI disintermediation fears, requiring more selectivity, the analyst tells investors in an outlook note on the software group. "While we remain confident that value will ultimately accrue to the software layer, investors may need to stay patient" with sector valuation back at historical average, the analyst added.
Piper Sandler
Neutral -> Overweight
upgrade
$43 -> $59
2025-12-11
Reason
Piper Sandler
Price Target
$43 -> $59
2025-12-11
upgrade
Neutral -> Overweight
Reason
Piper Sandler upgraded Unity to Overweight from Neutral with a price target of $59, up from $43. The firm says the mobile app advertising market "looks healthy" entering 2026. Unity's Vector ad business has grown 15% quarter-over-quarter in the past two quarters, the analyst tells investors in a research note. Piper sees an opportunity for the company's Grow segment to accelerate as Unity Vector ads scales at double-digits and Other Grow revenue stabilizes.
About U
Unity Software Inc. provides a platform for creating and growing games and interactive experiences. The Company offers a suite of tools across all platforms, from mobile, PC, and console, to extended reality (XR). Its set of software, including artificial intelligence (AI) solutions, supports creators through the entire development lifecycle. The Company’s platform consists of two complementary sets of solutions: Create Solutions and Grow Solutions. Create Solutions is a robust set of tools and services used to build, ship and run high-definition, real-time two-dimensional (2D) and three-dimensional (3D) content. Designed for developers, these tools and services are used across a range of industries, ranging from games to aerospace, construction to retail, medical to manufacturing, and others. Grow Solutions offers customers the ability to engage their user base and monetize their content from 2D puzzle games to multiplayer, multi-platform games, or other 3D interactive content.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
