U PE Ratio & Valuation,Is U Overvalued

U Relative Valuation

U's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average, adjusted by weights. If the market price exceeds this fair value range, U is overvalued; if below, it's undervalued.

Historical Valuation

Unity Software Inc (U) is now in the Fair zone, suggesting that its current forward PS ratio of 9.39 is considered Fairly compared with the five-year average of -94.76. The fair price of Unity Software Inc (U) is between 16.92 to 92.86 according to relative valuation methord.

Relative Value

Fair Zone

16.92-92.86

Current Price：45.56

Fair

51.03

39.06

EV/EBITDA

Unity Software Inc. (U) has a current EV/EBITDA of 39.06. The 5-year average EV/EBITDA is 1703.64. The thresholds are as follows: Strongly Undervalued below -14805.30, Undervalued between -14805.30 and -6550.83, Fairly Valued between 9958.11 and -6550.83, Overvalued between 9958.11 and 18212.58, and Strongly Overvalued above 18212.58. The current Forward EV/EBITDA of 39.06 falls within the Historic Trend Line -Fairly Valued range.

42.57

EV/EBIT

Unity Software Inc. (U) has a current EV/EBIT of 42.57. The 5-year average EV/EBIT is -149.03. The thresholds are as follows: Strongly Undervalued below -715.88, Undervalued between -715.88 and -432.45, Fairly Valued between 134.40 and -432.45, Overvalued between 134.40 and 417.83, and Strongly Overvalued above 417.83. The current Forward EV/EBIT of 42.57 falls within the Historic Trend Line -Fairly Valued range.

9.39

Unity Software Inc. (U) has a current PS of 9.39. The 5-year average PS is 11.64. The thresholds are as follows: Strongly Undervalued below -7.92, Undervalued between -7.92 and 1.86, Fairly Valued between 21.43 and 1.86, Overvalued between 21.43 and 31.21, and Strongly Overvalued above 31.21. The current Forward PS of 9.39 falls within the Historic Trend Line -Fairly Valued range.

44.33

P/OCF

Unity Software Inc. (U) has a current P/OCF of 44.33. The 5-year average P/OCF is -620.32. The thresholds are as follows: Strongly Undervalued below -3131.89, Undervalued between -3131.89 and -1876.11, Fairly Valued between 635.46 and -1876.11, Overvalued between 635.46 and 1891.24, and Strongly Overvalued above 1891.24. The current Forward P/OCF of 44.33 falls within the Historic Trend Line -Fairly Valued range.

42.73

P/FCF

Unity Software Inc. (U) has a current P/FCF of 42.73. The 5-year average P/FCF is -52.75. The thresholds are as follows: Strongly Undervalued below -724.24, Undervalued between -724.24 and -388.49, Fairly Valued between 282.99 and -388.49, Overvalued between 282.99 and 618.73, and Strongly Overvalued above 618.73. The current Forward P/FCF of 42.73 falls within the Historic Trend Line -Fairly Valued range.

Unity Software Inc (U) has a current Price-to-Book (P/B) ratio of 5.91. Compared to its 3-year average P/B ratio of 3.53 , the current P/B ratio is approximately 67.18% higher. Relative to its 5-year average P/B ratio of 7.05, the current P/B ratio is about -16.19% higher. Unity Software Inc (U) has a Forward Free Cash Flow (FCF) yield of approximately 2.06%. Compared to its 3-year average FCF yield of 1.46%, the current FCF yield is approximately 41.48% lower. Relative to its 5-year average FCF yield of 0.75% , the current FCF yield is about 174.18% lower.

5.91

P/B

Median3y

3.53

Median5y

7.05

2.06

FCF Yield

Median3y

1.46

Median5y

0.75

Competitors Valuation Multiple

The average P/S ratio for U's competitors is 8.69, providing a benchmark for relative valuation. Unity Software Inc Corp (U) exhibits a P/S ratio of 9.39, which is 8.05% above the industry average. Given its robust revenue growth of 5.40%, this premium appears unsustainable.

P/S

P/E

EV/EBITDA

EV/EBIT

Revenue Growth

Market Cap

Performance Decomposition

Market capitalization of U increased by 105.18% over the past 1 year. The primary factor behind the change was an decrease in P/E Change from -20.74 to -42.14.

The secondary factor is the Revenue Growth, contributed 5.40%to the performance.

Overall, the performance of U in the past 1 year is driven by P/E Change. Which is more unsustainable.

5.40%

446.52M → 470.62M

Revenue Growth

-3.37%

-27.89 → -26.95

Margin Expansion

103.15%

-20.74 → -42.14

P/E Change

105.18%

22.20 → 45.55

Mkt Cap Growth

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Frequently Asked Questions

Is Unity Software Inc (U) currently overvalued or undervalued?

What is Unity Software Inc (U) fair value?

U's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average , adjusted by weights. The fair price of Unity Software Inc (U) is between 16.92 to 92.86 according to relative valuation methord.

How does U's valuation metrics compare to the industry average?

What is the current P/B ratio for Unity Software Inc (U) as of Jan 07 2026?

As of Jan 07 2026, Unity Software Inc (U) has a P/B ratio of 5.91. This indicates that the market values U at 5.91 times its book value.

What is the current FCF Yield for Unity Software Inc (U) as of Jan 07 2026?

As of Jan 07 2026, Unity Software Inc (U) has a FCF Yield of 2.06%. This means that for every dollar of Unity Software Inc’s market capitalization, the company generates 2.06 cents in free cash flow.

What is the current Forward P/E ratio for Unity Software Inc (U) as of Jan 07 2026?

As of Jan 07 2026, Unity Software Inc (U) has a Forward P/E ratio of 51.03. This means the market is willing to pay $51.03 for every dollar of Unity Software Inc’s expected earnings over the next 12 months.

What is the current Forward P/S ratio for Unity Software Inc (U) as of Jan 07 2026?

As of Jan 07 2026, Unity Software Inc (U) has a Forward P/S ratio of 9.39. This means the market is valuing U at $9.39 for every dollar of expected revenue over the next 12 months.

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