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Unity Software Inc. (U) Falls More Steeply Than Broader Market: What Investors Need to Know

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Unity Software Inc. (U - Free Report) closed at $36.08 in the latest trading session, marking a -7.39% move from the prior day. The stock trailed the S&P 500, which registered a daily loss of 2.71%. At the same time, the Dow lost 1.9%, and the tech-heavy Nasdaq lost 3.56%.

Heading into today, shares of the company had lost 10.23% over the past month, lagging the Computer and Technology sector's gain of 6.22% and the S&P 500's gain of 3.5%.

Analysts and investors alike will be keeping a close eye on the performance of Unity Software Inc. in its upcoming earnings disclosure. It is anticipated that the company will report an EPS of $0.17, marking a 154.84% rise compared to the same quarter of the previous year. Meanwhile, our latest consensus estimate is calling for revenue of $447.48 million, up 0.21% from the prior-year quarter.

For the full year, the Zacks Consensus Estimates are projecting earnings of $0.78 per share and revenue of $1.81 billion, which would represent changes of +146.43% and -0.37%, respectively, from the prior year.

Any recent changes to analyst estimates for Unity Software Inc. should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. As of now, Unity Software Inc. holds a Zacks Rank of #3 (Hold).

From a valuation perspective, Unity Software Inc. is currently exchanging hands at a Forward P/E ratio of 50.16. Its industry sports an average Forward P/E of 30.41, so one might conclude that Unity Software Inc. is trading at a premium comparatively.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 83, which puts it in the top 34% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.


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