Unity Reports 10% Revenue Growth in Q4
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2h ago
0mins
Should l Buy U?
Source: stocktwits
- Earnings Highlights: Unity reported Q4 revenue of $503 million, reflecting a 10% year-on-year increase, with adjusted earnings per share at $0.24, both exceeding analyst expectations, indicating the company's resilience and growth potential in the game development engine market.
- Market Reaction: Despite a 34% drop in Unity's stock price due to pressure from Google's new AI tool, retail sentiment on Stocktwits shifted from 'bearish' to 'extremely bullish', suggesting a recovery in market confidence regarding the company's future.
- Revenue Breakdown: Create Solutions revenue reached $165 million, up 8% year-on-year, while Grow Solutions revenue rose 11% to $338 million, highlighting the critical role of Unity Vector, which accounted for 56% of the segment's revenue in driving growth.
- Outlook: Unity expects Q1 fiscal year 2026 revenue in the range of $480 million to $490 million, below the analyst consensus of $491.78 million; however, the CEO remains optimistic about the company's profitability and revenue growth prospects, asserting that new tools will expand creative possibilities.
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Analyst Views on U
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
13 Buy
6 Hold
1 Sell
Moderate Buy
Current: 29.060
Low
21.00
Averages
48.71
High
60.00
Current: 29.060
Low
21.00
Averages
48.71
High
60.00
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.
Unity Software Inc Set to Release Q4 Earnings on February 11
- Earnings Announcement Schedule: Unity Software Inc is set to announce its Q4 earnings on February 11 before market open, with consensus EPS estimate at $0.21 and revenue expected at $492.22 million, reflecting a 7.7% year-over-year growth.
- Performance Expectations: Over the past year, Unity has beaten EPS and revenue estimates 75% of the time, indicating a stable performance and potential growth capability in the market.
- Estimate Revision Dynamics: In the last three months, EPS estimates have seen one upward revision and one downward revision, while revenue estimates have experienced seven upward revisions and two downward revisions, reflecting market divergence regarding Unity's future performance.
- Stock Price Volatility: Unity's shares fell 37% over six trading sessions, extending the decline into a seventh session, indicating market concerns regarding its future financial performance.
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- Performance Decline Warning: While PayPal reported a 9% increase in total payment volume, a 5% drop in transactions per active account highlights challenges in user growth and profitability, potentially affecting future market competitiveness.
- New CEO Challenges: The appointment of Enrique Lores raises concerns due to his lackluster performance at HP, leading investors to question his ability to effectively drive PayPal's transformation, which may impact the company's strategic direction.
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- Executive Shakeup Impact: PayPal's CEO Alex Chris is replaced after less than two years, leading to a nearly 20% drop in stock price, indicating investor unease about the company's future direction amidst challenges in the payment processing sector.
- Performance Decline Warning: Despite a 5% drop in transaction volume over the past year, PayPal is focusing on its most profitable products, yet skepticism about new CEO Enrique Lores' capabilities has resulted in significant stock volatility.
- Investor Confidence Eroded: PayPal's stock has fallen approximately 27% during Chris's tenure and nearly 43% from its peak, reflecting a decline in investor trust in management, particularly in a fiercely competitive market.
- Uncertain Future Outlook: Although PayPal's current P/E ratio is just 8.5, significantly below market levels, some analysts view this as a potential value trap, while others believe there are still growth opportunities under new leadership.
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- Vertiv's Upbeat Guidance: Vertiv's stock jumped nearly 20% due to its optimistic guidance for 2026, with orders accelerating significantly in Q4, surpassing Wall Street expectations and indicating strong demand in the data center market.
- Unity Software's Downgrade: Unity Software's shares fell nearly 30% after issuing a first-quarter revenue outlook between $480 million and $490 million, below analysts' expectations of $492.1 million, raising concerns about its future growth prospects.
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Unity Software Q4 Earnings Call Insights
- Earnings Release: Unity Software reported its fourth-quarter earnings on Wednesday, and while specific financial metrics were not disclosed, the market response indicates bearish pressure on the stock, reflecting investor concerns about future growth.
- Market Reaction: Following the earnings announcement, Unity's stock experienced a decline, suggesting weakened investor confidence in the company's future performance, which could impact its position in the highly competitive gaming and software market.
- Customer Demand: Management noted increasing demand for the upcoming Commerce tools, particularly among specific segments of their client base, which could provide new revenue growth opportunities for the company moving forward.
- Analyst Inquiries: During the Q&A session, analysts expressed concerns regarding the implications of Google Genie, highlighting market expectations and anxieties about Unity's technological innovation and competitive edge.
See More
Unity Reports 10% Revenue Growth in Q4
- Earnings Highlights: Unity reported Q4 revenue of $503 million, reflecting a 10% year-on-year increase, with adjusted earnings per share at $0.24, both exceeding analyst expectations, indicating the company's resilience and growth potential in the game development engine market.
- Market Reaction: Despite a 34% drop in Unity's stock price due to pressure from Google's new AI tool, retail sentiment on Stocktwits shifted from 'bearish' to 'extremely bullish', suggesting a recovery in market confidence regarding the company's future.
- Revenue Breakdown: Create Solutions revenue reached $165 million, up 8% year-on-year, while Grow Solutions revenue rose 11% to $338 million, highlighting the critical role of Unity Vector, which accounted for 56% of the segment's revenue in driving growth.
- Outlook: Unity expects Q1 fiscal year 2026 revenue in the range of $480 million to $490 million, below the analyst consensus of $491.78 million; however, the CEO remains optimistic about the company's profitability and revenue growth prospects, asserting that new tools will expand creative possibilities.
See More
Unity Software Inc Set to Release Q4 Earnings on February 11
- Earnings Announcement Schedule: Unity Software Inc is set to announce its Q4 earnings on February 11 before market open, with consensus EPS estimate at $0.21 and revenue expected at $492.22 million, reflecting a 7.7% year-over-year growth.
- Performance Expectations: Over the past year, Unity has beaten EPS and revenue estimates 75% of the time, indicating a stable performance and potential growth capability in the market.
- Estimate Revision Dynamics: In the last three months, EPS estimates have seen one upward revision and one downward revision, while revenue estimates have experienced seven upward revisions and two downward revisions, reflecting market divergence regarding Unity's future performance.
- Stock Price Volatility: Unity's shares fell 37% over six trading sessions, extending the decline into a seventh session, indicating market concerns regarding its future financial performance.
See More
PayPal's CEO Change Sparks Stock Volatility
- Executive Shakeup Impact: PayPal's CEO Alex Chris is replaced after less than two years, resulting in a nearly 20% drop in stock price following earnings reports, indicating strong market reaction to management changes that could undermine investor confidence.
- Performance Decline Warning: While PayPal reported a 9% increase in total payment volume, a 5% drop in transactions per active account highlights challenges in user growth and profitability, potentially affecting future market competitiveness.
- New CEO Challenges: The appointment of Enrique Lores raises concerns due to his lackluster performance at HP, leading investors to question his ability to effectively drive PayPal's transformation, which may impact the company's strategic direction.
- Market Valuation Slump: With a current P/E ratio around 8.5, significantly below market averages, PayPal is seen as a value investment opportunity; however, investor concerns about future growth may lead to further stock price pressure.
See More
PayPal CEO Change Triggers Significant Stock Drop
- Executive Shakeup Impact: PayPal's CEO Alex Chris is replaced after less than two years, leading to a nearly 20% drop in stock price, indicating investor unease about the company's future direction amidst challenges in the payment processing sector.
- Performance Decline Warning: Despite a 5% drop in transaction volume over the past year, PayPal is focusing on its most profitable products, yet skepticism about new CEO Enrique Lores' capabilities has resulted in significant stock volatility.
- Investor Confidence Eroded: PayPal's stock has fallen approximately 27% during Chris's tenure and nearly 43% from its peak, reflecting a decline in investor trust in management, particularly in a fiercely competitive market.
- Uncertain Future Outlook: Although PayPal's current P/E ratio is just 8.5, significantly below market levels, some analysts view this as a potential value trap, while others believe there are still growth opportunities under new leadership.
See More
Stock Price Movements of Various Companies
- Acadia Healthcare Stock Surge: Acadia Healthcare's stock rose 10% after investor David Einhorn announced his purchases, reflecting market optimism about the new management's ability to enhance performance, which could improve future profitability.
- Vertiv's Upbeat Guidance: Vertiv's stock jumped nearly 20% due to its optimistic guidance for 2026, with orders accelerating significantly in Q4, surpassing Wall Street expectations and indicating strong demand in the data center market.
- Unity Software's Downgrade: Unity Software's shares fell nearly 30% after issuing a first-quarter revenue outlook between $480 million and $490 million, below analysts' expectations of $492.1 million, raising concerns about its future growth prospects.
- Smurfit WestRock Order Improvement: Smurfit WestRock's stock soared over 10% after revealing improved product orders in late December, with expectations of reaching $7 billion in profits by 2030, highlighting its long-term growth potential.
See More
Unity Software Q4 Earnings Call Insights
- Earnings Release: Unity Software reported its fourth-quarter earnings on Wednesday, and while specific financial metrics were not disclosed, the market response indicates bearish pressure on the stock, reflecting investor concerns about future growth.
- Market Reaction: Following the earnings announcement, Unity's stock experienced a decline, suggesting weakened investor confidence in the company's future performance, which could impact its position in the highly competitive gaming and software market.
- Customer Demand: Management noted increasing demand for the upcoming Commerce tools, particularly among specific segments of their client base, which could provide new revenue growth opportunities for the company moving forward.
- Analyst Inquiries: During the Q&A session, analysts expressed concerns regarding the implications of Google Genie, highlighting market expectations and anxieties about Unity's technological innovation and competitive edge.
See More
Unity Reports 10% Revenue Growth in Q4
- Earnings Highlights: Unity reported Q4 revenue of $503 million, reflecting a 10% year-on-year increase, with adjusted earnings per share at $0.24, both exceeding analyst expectations, indicating the company's resilience and growth potential in the game development engine market.
- Market Reaction: Despite a 34% drop in Unity's stock price due to pressure from Google's new AI tool, retail sentiment on Stocktwits shifted from 'bearish' to 'extremely bullish', suggesting a recovery in market confidence regarding the company's future.
- Revenue Breakdown: Create Solutions revenue reached $165 million, up 8% year-on-year, while Grow Solutions revenue rose 11% to $338 million, highlighting the critical role of Unity Vector, which accounted for 56% of the segment's revenue in driving growth.
- Outlook: Unity expects Q1 fiscal year 2026 revenue in the range of $480 million to $490 million, below the analyst consensus of $491.78 million; however, the CEO remains optimistic about the company's profitability and revenue growth prospects, asserting that new tools will expand creative possibilities.
See More
