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Unity Software Inc. (U) Registers a Bigger Fall Than the Market: Important Facts to Note

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Unity Software Inc. (U - Free Report) ended the recent trading session at $26.25, demonstrating a -1.35% swing from the preceding day's closing price. This change lagged the S&P 500's 0.72% loss on the day. Elsewhere, the Dow saw a downswing of 1%, while the tech-heavy Nasdaq depreciated by 0.95%.

Coming into today, shares of the company had lost 1.48% in the past month. In that same time, the Computer and Technology sector gained 2.34%, while the S&P 500 gained 2.16%.

Market participants will be closely following the financial results of Unity Software Inc. in its upcoming release. The company's earnings per share (EPS) are projected to be $0.05, reflecting a 16.67% decrease from the same quarter last year. Simultaneously, our latest consensus estimate expects the revenue to be $422.53 million, showing a 15.55% drop compared to the year-ago quarter.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $0.61 per share and a revenue of $1.79 billion, signifying shifts of +48.78% and -18.12%, respectively, from the last year.

Investors should also note any recent changes to analyst estimates for Unity Software Inc. Recent revisions tend to reflect the latest near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. Right now, Unity Software Inc. possesses a Zacks Rank of #3 (Hold).

In the context of valuation, Unity Software Inc. is at present trading with a Forward P/E ratio of 43.5. Its industry sports an average Forward P/E of 29.23, so one might conclude that Unity Software Inc. is trading at a premium comparatively.

We can additionally observe that U currently boasts a PEG ratio of 1.67. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Internet - Software industry currently had an average PEG ratio of 1.92 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 34, placing it within the top 14% of over 250 industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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