Unity Software Inc. (U) Outperforms Broader Market: What You Need to Know

The most recent trading session ended with Unity Software Inc. (U) standing at $27.57, reflecting a +1.55% shift from the previouse trading day's closing. This change outpaced the S&P 500's 0.32% gain on the day. Elsewhere, the Dow gained 0.68%, while the tech-heavy Nasdaq added 0.2%.

The company's stock has dropped by 11.94% in the past month, falling short of the Computer and Technology sector's gain of 6.04% and the S&P 500's gain of 5.11%.

The investment community will be paying close attention to the earnings performance of Unity Software Inc. in its upcoming release. 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%. In the meantime, our current consensus estimate forecasts the revenue to be $422.53 million, indicating a 15.55% decline compared to the corresponding quarter of the prior year.

U's full-year Zacks Consensus Estimates are calling for earnings of $0.61 per share and revenue of $1.79 billion. These results would represent year-over-year changes of +48.78% and -18.12%, respectively.

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. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational 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. Over the past month, the Zacks Consensus EPS estimate has shifted 22.22% downward. As of now, Unity Software Inc. holds 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 44.39. Its industry sports an average Forward P/E of 30.66, so one might conclude that Unity Software Inc. is trading at a premium comparatively.

It is also worth noting that U currently has a PEG ratio of 1.71. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Internet - Software was holding an average PEG ratio of 1.82 at yesterday's closing price.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 40, putting it in the top 16% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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