Should I Buy U? U 2026 Analysis

Should You Buy Unity Software Inc (U) Today? Analysis, Price Targets, and 2026 Outlook.

Conclusion

Buy

Latest Price

38.330

1 Day change

-4.57%

52 Week Range

52.150

Analysis Updated At

2026/01/26

Unity Software Inc. (U) is a good buy for a beginner investor with a long-term strategy and $50,000-$100,000 available for investment. The company shows positive growth potential, driven by its expanding ad network, diversification into industries beyond gaming, and improving financial metrics. Despite some technical indicators being neutral, the long-term outlook, analyst upgrades, and hedge fund interest make this a solid investment opportunity.

Technical Analysis

The stock's MACD is negative (-0.438) but contracting, RSI is neutral at 42.87, and moving averages are converging, indicating no strong trend. Key support is at $40.447, and resistance is at $43.925. The stock is trading near support levels, which may present a good entry point.

Options Data

Bullish

Open Interest Put-Call Ratio

Bullish

Option Volume Put-Call Ratio

Technical Summary

Sell

Buy

Positive Catalysts

Hedge funds are significantly increasing their positions in Unity, with a 183.89% increase in buying over the last quarter.
Unity is expanding into the automotive industry, indicating future growth potential.
Analysts have raised price targets and upgraded the stock, with targets ranging from $51 to $
Revenue growth of 5.40% YoY and free cash flow increase of 31% YoY in the latest quarter.

Neutral/Negative Catalysts

Persistent challenges at Ironsource, with Q4 revenue projected to decline by 5% quarter-over-quarter.
EPS dropped by 3.23% YoY, and net income remains negative at -$126.36M.
Gross margin slightly declined to 74.43%.

Financial Performance

In Q3 2025, Unity's revenue increased by 5.40% YoY to $470.62M. Net income improved slightly but remained negative at -$126.36M. EPS dropped by 3.23% YoY to -0.3, and gross margin slightly declined to 74.43%. Free cash flow increased by 31% YoY, indicating improved operational efficiency.

Growth

Profitability

Efficiency

Analyst Ratings and Price Target Trends

Analysts are bullish on Unity, with multiple upgrades and price target increases. Recent upgrades include Wells Fargo ($54), Jefferies ($55), Piper Sandler ($59), BTIG ($60), and Wedbush ($55). Analysts highlight Unity's strong position in mobile advertising, AI monetization potential, and undervalued shares as key drivers for long-term growth.

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 USD and a high forecast of 60 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

Averages

48.71

High

Current: 40.160

Low

Averages

48.71

High

BofA

Underperform

downgrade

$21 -> $18

AI Analysis

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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U Should I Buy

U Should I Buy

Should You Buy Unity Software Inc (U) Today? Analysis, Price Targets, and 2026 Outlook.

Technical Analysis

Options Data

Technical Summary

Positive Catalysts

Neutral/Negative Catalysts

Financial Performance

Growth

Profitability

Efficiency

Analyst Ratings and Price Target Trends

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