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Unity Software Q3 Preview: Can Shares Find Relief?
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The Zacks Computer and Technology sector has struggled in 2022 amid a hawkish pivot from the Fed, down more than 30% year-to-date and widely underperforming the S&P 500.
A popular name in the sector, Unity Software (U - Free Report) , is on deck to unveil Q3 earnings on November 9th, after the market close.
Unity Software’s platform provides a set of software solutions to create, run and monetize interactive, real-time 2D and 3D content for mobile phones, tablets, PCs, consoles, and augmented and virtual reality devices.
Currently, the company carries a Zacks Rank #3 (Hold) paired with an overall VGM Score of an F.
How does everything else shape up? Let’s take a look.
Share Performance & Valuation
Year-to-date, it’s been a challenging road for U shares, down more than 80% and coming nowhere near the general market’s performance.
Image Source: Zacks Investment Research
Over the last three months, the adverse price action of Unity Software shares has continued, losing more than 50% in value and again underperforming the general market.
Image Source: Zacks Investment Research
Shares trade at a 5.8X forward price-to-sales ratio, well above that of its Zacks Sector average of 3.1X. Still, the value is a fraction of its 26.1X median since its IPO in 2020.
Unity Software carries a Value Style Score of an F.
Image Source: Zacks Investment Research
Quarterly Estimates
Analysts have been silent for the quarter to be reported over the last several months, with zero earnings estimate revisions coming in. The Zacks Consensus EPS Estimate of -$0.14 suggests a Y/Y decline in earnings of roughly 130%.
Image Source: Zacks Investment Research
The company’s top-line is in better health; the Zacks Consensus Sales Estimate of $323.3 million indicates an improvement of nearly 13% from year-ago quarterly sales of $286.3 million.
Quarterly Performance
Unity Software has primarily exceeded bottom-line estimates, beating out the Zacks Consensus EPS Estimate in six of its last eight quarters. Just in its latest print, U surpassed earnings expectations by 10%.
Top-line results paint a similarly positive story; U has exceeded revenue estimates in seven of its last eight quarters. Below is a chart illustrating the company’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
Putting Everything Together
U shares have sailed through rough waters in 2022, underperforming the S&P 500 by wide margins across several timeframes.
The company’s forward price-to-sales ratio is on the higher end of the spectrum, typical of stocks with a high-growth nature.
Analysts haven’t had anything to say regarding the quarter, and estimates reflect an uptick in revenue and a decrease in earnings – likely a reflection of margin compression.
The company has consistently exceeded quarterly estimates, and its latest quarter brought a sizable bottom-line beat.
Heading into the print, Unity Software (U - Free Report) carries a Zacks Rank #3 (Hold) with an overall VGM Score of an F.
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Unity Software Q3 Preview: Can Shares Find Relief?
The Zacks Computer and Technology sector has struggled in 2022 amid a hawkish pivot from the Fed, down more than 30% year-to-date and widely underperforming the S&P 500.
A popular name in the sector, Unity Software (U - Free Report) , is on deck to unveil Q3 earnings on November 9th, after the market close.
Unity Software’s platform provides a set of software solutions to create, run and monetize interactive, real-time 2D and 3D content for mobile phones, tablets, PCs, consoles, and augmented and virtual reality devices.
Currently, the company carries a Zacks Rank #3 (Hold) paired with an overall VGM Score of an F.
How does everything else shape up? Let’s take a look.
Share Performance & Valuation
Year-to-date, it’s been a challenging road for U shares, down more than 80% and coming nowhere near the general market’s performance.
Image Source: Zacks Investment Research
Over the last three months, the adverse price action of Unity Software shares has continued, losing more than 50% in value and again underperforming the general market.
Image Source: Zacks Investment Research
Shares trade at a 5.8X forward price-to-sales ratio, well above that of its Zacks Sector average of 3.1X. Still, the value is a fraction of its 26.1X median since its IPO in 2020.
Unity Software carries a Value Style Score of an F.
Image Source: Zacks Investment Research
Quarterly Estimates
Analysts have been silent for the quarter to be reported over the last several months, with zero earnings estimate revisions coming in. The Zacks Consensus EPS Estimate of -$0.14 suggests a Y/Y decline in earnings of roughly 130%.
Image Source: Zacks Investment Research
The company’s top-line is in better health; the Zacks Consensus Sales Estimate of $323.3 million indicates an improvement of nearly 13% from year-ago quarterly sales of $286.3 million.
Quarterly Performance
Unity Software has primarily exceeded bottom-line estimates, beating out the Zacks Consensus EPS Estimate in six of its last eight quarters. Just in its latest print, U surpassed earnings expectations by 10%.
Top-line results paint a similarly positive story; U has exceeded revenue estimates in seven of its last eight quarters. Below is a chart illustrating the company’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
Putting Everything Together
U shares have sailed through rough waters in 2022, underperforming the S&P 500 by wide margins across several timeframes.
The company’s forward price-to-sales ratio is on the higher end of the spectrum, typical of stocks with a high-growth nature.
Analysts haven’t had anything to say regarding the quarter, and estimates reflect an uptick in revenue and a decrease in earnings – likely a reflection of margin compression.
The company has consistently exceeded quarterly estimates, and its latest quarter brought a sizable bottom-line beat.
Heading into the print, Unity Software (U - Free Report) carries a Zacks Rank #3 (Hold) with an overall VGM Score of an F.