Unity Software: Down Now, Much Stronger Later

Summary:

  • Unity shares are down 85% from their peak and haven’t recovered this year.
  • The culprits have been the previous excessive valuation coupled with a disappointing forecast for organic revenue growth delivered in the last quarterly report.
  • There is some suggestion in the context of the forecast that the macro headwinds have reached their apogee.
  • The company’s sales synergy opportunities through the combination with Iron Source are little valued by many at this point, yet are substantial.
  • The company has announced important non-Game product initiatives, most recently including Unity Manufacturing.

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Alberto Menendez/iStock via Getty Images

Unity shares: Unloved, left as road kill – is there something here to consider?

Unity (NYSE:U) Software is the largest, and most well established company in the market for creating, running and monetizing interactive, real-time content (mainly games) for


Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in U over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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