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Unity Software Inc. (U) Stock Drops Despite Market Gains: Important Facts to Note

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Unity Software Inc. (U - Free Report) closed the latest trading day at $24, indicating a -1.78% change from the previous session's end. The stock's performance was behind the S&P 500's daily gain of 0.03%. Meanwhile, the Dow gained 0.41%, and the Nasdaq, a tech-heavy index, added 0.12%.

Prior to today's trading, shares of the company had lost 6.29% over the past month. This has lagged the Computer and Technology sector's loss of 0.55% and the S&P 500's loss of 0.9% in that time.

Analysts and investors alike will be keeping a close eye on the performance of Unity Software Inc. in its upcoming earnings disclosure. The company's earnings report is set to go public on May 9, 2024. In that report, analysts expect Unity Software Inc. to post earnings of $0.05 per share. This would mark a year-over-year decline of 16.67%. Meanwhile, our latest consensus estimate is calling for revenue of $422.53 million, down 15.55% from the prior-year quarter.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $0.61 per share and revenue of $1.79 billion. These totals would mark changes of +48.78% and -18.12%, respectively, from last year.

Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Unity Software Inc. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Unity Software Inc. is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, Unity Software Inc. is currently trading at a Forward P/E ratio of 39.94. This expresses a premium compared to the average Forward P/E of 27.33 of its industry.

Meanwhile, U's PEG ratio is currently 1.54. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. U's industry had an average PEG ratio of 1.79 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 47, positioning it in the top 19% of all 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.

Keep in mind to rely on to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

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