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Unity Software Inc (U)

Overvalued
TechnologySoftware - ApplicationUnited States

Fundamental

44

Price

$40.93

Market Cap

$17.54B

Part 1 · What the company is worth

Overview

Unity Software Inc. operates a platform to develop, deploy, and grow games and interactive experiences for mobile phones, PCs, consoles, and extended reality devices in the United States, China, Hong Kong, Taiwan, Europe, the Middle East, Africa, the Asia Pacific, Canada, and Latin America. The company's platform offers artificial intelligence solutions that support developers through the entire development lifecycle, which includes prototyping, live service operation, user acquisition, and monetization. It also provides Create Solutions, a set of tools and services used to build, ship, and run real-time 2D and 3D content; and Grow Solutions, which allows customers to grow and engage their user base and monetize their content. In addition, the company offers enterprise support and consumption services; professional services, including consulting, platform integration, training, and custom application and workflow development services; and advertising and game publishing services. It provides its solutions directly through its online store, field sales operations, independent distributors, and resellers. The company serves enterprises, mid-market companies, government, and non-profit institutions; mid-sized, small, and independent businesses; and individuals from various industries. Unity Software Inc. was founded in 2004 and is headquartered in San Francisco, California.

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Direct competitors

Who this company fights with for the same customers

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No competitor list for this company yet.

Balance Sheet & Liquidity

Revenue

$2.03B

Trailing 12 months (through 6/30/2026)

Net Income

$-588M

Trailing 12 months (through 6/30/2026)

Free Cash Flow

$404M

Total Equity

$3.24B

Total Liabilities

$3.34B

Current Ratio

2.03

Interest Coverage

25.52

Debt/EBITDA

-

Earnings Per Share

Revenue & Net Income

Free Cash Flow

Income Breakdown

Historical statement

Margins over time

Debt over time

How heavy the debt is

Growth grid

Growth — Revenue

Fair Value Estimation

General caseOvervalued

Fair Value

$32.14

Current Price

$40.93

Margin of Safety

-27.3%

Fair Value Range

$20.89 - $43.39

Spread across the valuation methods used, not a statistically calibrated confidence interval.

Estimation Methods

Analyst price target:$49.39
Discounted cash flow (DCF):$9.14
Earnings multiple (P/E):Not enough data to compute it
Graham growth formula:Not enough data to compute it
Earnings power value (EPV):Not enough data to compute it
Justified P/B:Not enough data to compute it
Dividend discount (Gordon):Not enough data to compute it
P/FFO, funds from operations:$2.12
Mid-cycle earnings:Not enough data to compute it
Revenue multiple:$23.64
Analyst Consensus:Strong Buy (29B / 5H / 0S)
Last Earnings Surprise:+42.33%

Valuation Metrics

P/E Ratio

-

ROE

-12.4%

P/B Ratio

5.94

P/FCF

33.46

Gross Margin

64.9%

ROIC

-9.6%

Profitability Radar

Value Creation (Economic Moat)

ROIC

-9.6%

WACC

14.1%

ROIC − WACC

-23.7 pp

ROIC is below the cost of capital — the company is destroying value for every dollar invested.

Fundamental Analysis Criteria

Passed (11)

  • EPS shows upward trend
  • Gross Margin 64.9%
  • Debt/Equity ratio
  • Positive Free Cash Flow
  • CapEx intensity
  • Current Ratio
  • Interest Coverage
  • Revenue Growth 5Y 19.1%
  • Analyst Consensus 85% Buy
  • Earnings Surprise avg 14.8%
  • Piotroski F-Score 6/9

Failed (11)

  • Price CAGR -18.81%
  • ROIC -9.6%
  • P/FCF 33.46
  • P/B Ratio 5.94
  • Operating Margin -30.4%
  • Return on Tangible Assets
  • Low reliance on intangibles
  • DCF valuation (Overvalued)
  • ROE -18.9%
  • Share Dilution 6.1%
  • Net Margin Trend -29.0% vs -24.4%

Unavailable (5)

  • Dividend Payout NaN%
  • Debt/EBITDA
  • Price below Graham Number
  • PEG Ratio (need PE > 0 and growth > 0)
  • Earnings Quality (OCF/Net Income)

Piotroski F-Score

6/9

Mixed signals: some areas need attention

score
criteria

Earnings Quality

-

Low quality: investigate accounting

Share Dilution

6.1%

Issuing new shares, diluting ownership

Institutional Holdings

Governance

Executive Team

NameTitleAge
Mr. Matthew Samuel Bromberg J.D.CEO, President & Director59
Mr. Jarrod YahesCFO & Senior VP49
Mr. Alexander BlumCOO & Senior VP62
Mr. Felix TheSenior VP of Product & Technology and Chief AI Officer of Grow40
Mr. Joachim Christoph AnteCo-Founder42
Mr. Alexander Joseph GiaimoHead of Investor Relations-
Ms. Rebecca BoydenSenior VP, Chief Legal Officer & Corporate Secretary-
Ms. Marisa EddySenior VP & Chief People Officer-
Adam SmithSenior Vice President of Product of Unity Engine-
Shanti GaudreaultSenior Vice President of Engineering-

Audit Risk

4

Board Risk

8

Compensation Risk

10

Shareholder Rights Risk

8

Part 2 · The price and when to enter

This part won't tell you whether the company is worth owning: it helps you choose when to buy it, once the fundamentals have convinced you. Inside: technical analysis, potential, historical drawdowns, gamma exposure.

Documents

  • Annual Report (10-K)

    A yearly overview of the business, its financial results, and the risks it faces.

    Filed on 2026-02-11

    View document
  • Quarterly Report (10-Q)

    A snapshot of financial performance for the most recent three-month period.

    Filed on 2026-08-06

    View document
  • Current Report (8-K)

    An announcement of a major event, such as a leadership change or big news.

    Filed on 2026-08-19

    View document

via SEC EDGAR

Income History

via SEC EDGAR

Latest News

Recent headlines for U, sourced from Markets Gazette.

  • 3/26/2026POSITIVE
    Unity Software Stock Soars After The Close: Here's Why

    Unity Software Inc. experienced a significant surge in its stock price during after-hours trading following the release of preliminary first-quarter results. While specific figures were not detailed in the initial report, the market's positive reaction suggests these preliminary results exceeded investor expectations. This upward movement indicates renewed confidence in Unity's business outlook and its ability to execute its strategy. Investors will be closely watching for the full financial report to understand the drivers behind this positive momentum and its implications for future growth.

  • 3/13/2026POSITIVE
    AI Is Coming for Unity Software. Here's Why It Survives.

    Despite widespread fears of AI-driven disruption in the software sector, Unity Software Inc. is poised for resilience. The company's core offerings in game development and real-time 3D are seen as adaptable rather than obsolete in the face of AI advancements. Investors should note that Unity's platform is increasingly being leveraged for non-gaming applications, such as industrial simulations and architectural visualization, diversifying its revenue streams. This strategic expansion, coupled with ongoing innovation in its engine capabilities, suggests a robust future outlook, mitigating immediate threats from AI competition.

  • 3/2/2026POSITIVE
    Are Unity and Zillow Resilient Brands?

    Markets Gazette delves into the intrinsic value of companies boasting strong consumer appeal, highlighting Unity and Zillow as prime examples. The core question explored is why such brands consistently tend to outperform the broader market. The analysis suggests that brand resilience, customer loyalty, and a deep connection with their user base are pivotal factors. For investors, this implies that brand strength is not merely an intangible asset but a predictive indicator of financial stability and sustainable growth. Companies that successfully build and maintain a robust relationship with their consumers are often better positioned to navigate economic challenges and capitalize on market opportunities, offering superior return potential.

via Markets Gazette