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Here's Why Unity Software Inc. (U) Gained But Lagged the Market Today

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Unity Software Inc. (U - Free Report) ended the recent trading session at $25.36, demonstrating a +0.16% swing from the preceding day's closing price. The stock lagged the S&P 500's daily gain of 1.11%. On the other hand, the Dow registered a gain of 0.8%, and the technology-centric Nasdaq increased by 1.24%.

Shares of the company have depreciated by 7.39% over the course of the past month, underperforming the Computer and Technology sector's gain of 0.85% and the S&P 500's gain of 0.48%.

The upcoming earnings release of Unity Software Inc. will be of great interest to investors. The company is predicted to post an EPS of $0.05, indicating a 16.67% decline compared to the equivalent quarter last year. Meanwhile, the latest consensus estimate predicts the revenue to be $422.53 million, indicating a 15.55% decrease compared to the same quarter of the previous year.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $0.61 per share and a revenue of $1.79 billion, indicating changes of +48.78% and -18.12%, respectively, from the former year.

Investors should also note any recent changes to analyst estimates for Unity Software Inc. These latest adjustments often mirror the shifting dynamics of short-term business patterns. 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. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. Unity Software Inc. presently features a Zacks Rank of #3 (Hold).

In terms of valuation, Unity Software Inc. is presently being traded at a Forward P/E ratio of 41.4. This signifies a premium in comparison to the average Forward P/E of 28.08 for its industry.

Meanwhile, U's PEG ratio is currently 1.59. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. U's industry had an average PEG ratio of 1.85 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 gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within 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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