Upside case
Bull case
—
The bull case requires both strong earnings delivery and the market pricing U more generously than it does today.
Analysis OverviewBuyUpdated Jun 18, 2026
Unity Software Inc. (U) Stock Analysis
Wall Street verdict, consensus price target, and analyst rating breakdown — everything needed to frame the risk/reward at today's price.
Analyst consensus
Buy
Covering
26
analysts
18 bullish · 0 bearish · 26 covering U
Strong Buy
0
Buy
18
Hold
8
Sell
0
Strong Sell
0
Consensus Target
$34
+24.0% vs today
Scenario Range
— – —
Model bear to bull value window
Coverage
26
Published analyst ratings
Valuation Context
—
Forward P/E · Market cap $12.0B
U price targets
Three scenarios for where U stock could go
Current
~$27
Confidence
60 / 100
Updated
Jun 18, 2026
Market caseClosest to today
Base case
—
The base case reflects analyst consensus expectations — steady delivery without requiring a major catalyst or re-rating.
Stress case
Bear case
—
The bear case reflects a scenario where earnings shortfalls or multiple compression combine to materially reduce the stock from its current level.
Not financial advice. Model confidence reflects internal scenario assumptions, not a guarantee of returns. Past performance does not predict future results.
Unity Software Inc.
U · NYSETechnologySoftware - ApplicationDecember year-end
Unity Software operates a real-time 3D development platform used by game developers and creators across industries. It generates revenue primarily through subscription fees for its Create Solutions engine tools (~60% of revenue) and through Operate Solutions — monetization services like ads and in-app purchases for developers (~40%). The company's moat lies in its massive developer ecosystem and network effects, where its engine's widespread adoption creates a standard that attracts more users and content.
Market Cap
$12.0B
Revenue TTM
$1.9B
Net Income TTM
-$672M
Net Margin
-35.0%
U Revenue and Earnings Performance
Quarterly beat-or-miss track record against analyst estimates, plus forward revenue and EPS outlook for the next two fiscal years.
EPS Beat Rate
67%Exceptional
12 quarters tracked
Revenue Beat Rate
83%Exceptional
vs consensus estimates
Avg EPS Surprise
-67.8%
above Street consensus
Beat / Miss Record
BeatMissLeft = EPS · Right = Revenue
Q3 2025
Q4 2025
Q1 2026
Q2 2026
Last 4 Quarters
EPS beats: 1 of 4Q3 2025
EPS
$-0.26/$0.14
Revenue
$441M/$428M
Q4 2025
EPS
$0.20/$0.18
Revenue
$471M/$453M
Q1 2026
EPS
$-0.21/$0.20
Revenue
$503M/$493M
Q2 2026
EPS
$-0.80/$-0.21
Revenue
$508M/$502M
| Quarter | EPS (Actual / Est) | EPS Surprise | Revenue (Actual / Est) | Rev Surprise |
|---|---|---|---|---|
| Q3 2025 | $-0.26/$0.14 | -287.9% | $441M/$428M | +3.1% |
| Q4 2025 | $0.20/$0.18 | +8.4% | $471M/$453M | +3.9% |
| Q1 2026 | $-0.21/$0.20 | -205.0% | $503M/$493M | +2.1% |
| Q2 2026 | $-0.80/$-0.21 | -278.9% | $508M/$502M | +1.3% |
FY1–FY2 Estimates
Revenue Outlook
FY1
$2.2B
+12.5% YoY
FY2
$2.4B
+12.2% YoY
EPS Outlook
FY1
$-1.10
+29.1% YoY
FY2
$-0.63
+42.9% YoY
Trailing FCF (TTM)$463M
FCF Margin: 24.1%
Next Earnings
August 5, 2026
Expected EPS
$0.24
Expected Revenue
$514M
U beat EPS estimates in 1 of 4 tracked quarters. Mixed delivery makes the upcoming report a key data point for re-rating.
U Revenue Breakdown by Segment
Product and geographic revenue mix from the latest annual disclosure, with year-over-year growth by segment.
Latest disclosure
FY 2025
Total disclosed revenue $1.8B
Product Mix
Latest annual revenue by segment or product family
Grow Solutions
66.4%
YoY unavailable
Tap, hover, or focus a slice to inspect segment detail.
Geographic Mix
Latest annual revenue by reported region
EMEA
32.5%
-6.6% YoY
Tap, hover, or focus a slice to inspect segment detail.
Grow Solutions is the largest disclosed segment at 66.4% of FY 2025 revenue, with no year-over-year comparison yet.
EMEA is the largest reported region at 32.5%, down 6.6% YoY.
U Valuation Snapshot
Current multiples compared to the S&P 500, the company's sector, and its own five-year average.
Relative Value Signal
Limited: Expensive versus peers
Fair value est. $20 — implies -28.5% from today's price.
Premium to Fair Value
28.5%
above fair value
Deep DiscountFair ValueVery Expensive
vs S&P 500 Trailing P/E
U
-28.6x
vs
S&P 500
24.4x
217% discount
vs Technology Trailing P/E
U
-28.6x
vs
Technology
29.0x
199% discount
vs U 5Y Avg P/E
Today
-28.6x
vs
5Y Average
—
Benchmark unavailable
Forward PE
—
S&P 500
18.8x
—
Technology
22.3x
—
5Y Avg
—
—
Trailing PE
-28.6x
S&P 500
24.4x
-217%
Technology
29.0x
-199%
5Y Avg
—
—
PEG Ratio
—
S&P 500
1.66x
—
Technology
1.51x
—
5Y Avg
—
—
EV/EBITDA
321.2x
S&P 500
15.2x
+2012%
Technology
16.6x
+1832%
5Y Avg
—
—
Price/FCF
29.7x
S&P 500
20.7x
+43%
Technology
19.2x
+55%
5Y Avg
55.2x
-46%
Price/Sales
6.5x
S&P 500
3.1x
+110%
Technology
2.4x
+166%
5Y Avg
13.0x
-50%
Dividend Yield
—
S&P 500
1.91%
—
Technology
1.11%
—
5Y Avg
—
—
| Metric | U | S&P 500 | Technology | 5Y Avg U |
|---|---|---|---|---|
| Forward PE | — | 18.8x | 22.3x | — |
| Trailing PE | -28.6x | 24.4x-217% | 29.0x-199% | — |
| PEG Ratio | — | 1.66x | 1.51x | — |
| EV/EBITDA | 321.2x | 15.2x+2012% | 16.6x+1832% | — |
| Price/FCF | 29.7x | 20.7x+43% | 19.2x+55% | 55.2x-46% |
| Price/Sales | 6.5x | 3.1x+110% | 2.4x+166% | 13.0x-50% |
| Dividend Yield | — | 1.91% | 1.11% | — |
U trades above S&P 500 benchmarks on 3 of 4 measured multiples — commands a broad premium across most valuation dimensions.
Forward P/E and PEG reflect analyst consensus estimates. Historical averages use trailing ratios where forward data is unavailable.S&P 500 and sector benchmarks both use trailing median P/E — similar readings indicate the broader index and sector are priced alike.
Open valuation toolU Financial Health
Verdict
Stressed
U generates $463M in free cash flow at a 24.1% margin.
Cash Engine
Revenue, margins, and cash generation
Revenue (TTM)
Trailing-twelve-month sales base
$1.9B
Revenue Growth
TTM vs prior year
+7.6%
Gross Margin
Gross profit as a share of revenue
59.4%
Operating Margin
Operating income divided by revenue
-36.1%
Net Margin
Net income divided by revenue
-35.0%
EPS (TTM)
Diluted earnings per share, trailing twelve months
$-1.55
Free Cash Flow (TTM)
Cash generation after capex
$463M
FCF Margin
FCF as share of revenue — the primary cash quality signal
24.1%
Capital Quality
ROIC, leverage, and debt serviceability
ROIC
Return on invested capital — primary competitive quality signal
-7.8%
ROA
Return on assets, trailing twelve months
-10.0%
Cash & Equivalents
Liquid assets on the balance sheet
$2.1B
Net Debt
Total debt minus cash
$330M
Debt Serviceability
Net debt as a multiple of annual free cash flow
0.7× FCF
~0.7 years to full repayment at current FCF run-rate
ROE
Return on equity, trailing twelve months
-19.7%
Shareholder Returns
How capital is returned to owners
Total shareholder yield
0.0%
Dividend
—
Buyback
0.0%
Share Repurchases
Trailing buyback outflow — dollar magnitude of capital returned
$0
Dividend / Share
Annualized trailing dividend per share
—
Payout Ratio
Share of earnings distributed as dividends
—
Shares Outstanding
Current diluted share count
437M
All figures from the trailing twelve months. ROIC uses invested capital (equity + net debt).
Open full ratios pageU Stock Risk Factors
Key factors that could pressure the stock price, compress the multiple, or weigh on future results.
AI analysis · updated June 18, 2026
High Risk
Operational missteps
Unity's operational missteps are contributing to financial instability and investor skepticism.
High Risk
Competitive disadvantages
The company faces significant competitive pressures that may erode its market position.
High Risk
Financial engineering concerns
Aggressive financial practices are raising red flags about sustainability and transparency.
Medium
Market contraction
A shrinking market for Unity's core offerings is limiting growth opportunities.
Medium
Stock performance pressure
The stock has shown bearish trends, reflecting weak investor confidence.
Lower
Product adoption friction
User onboarding complexities may hinder broader adoption of Unity's platform.
These are risk mechanisms, not predictions. The key question is which would force a cut to earnings estimates or a lower multiple than the market currently prices in.
Why U Stock Could Outperform
Structural drivers behind the upside case and why the stock could outperform over the next 12 months.
AI analysis · updated June 18, 2026
Leading game engine dominance
Unity is the world’s leading game engine, supported by a robust development community and a system that ensures informed decision-making.
Mobile gaming expansion
Unity's dominance in mobile gaming and its expansion into enterprise sectors are key growth drivers.
Strong community and resources
Unity provides extensive learning resources, tutorials, and documentation, fostering a strong developer community.
Enterprise sector growth
Unity's refocus on core strengths and expansion into enterprise sectors have contributed to significant stock appreciation.
Cross-platform versatility
Unity's cross-platform game engine capabilities make it a versatile tool for developers across various platforms.
Developer ecosystem strength
Unity's ecosystem, including tools like Unity Hub, supports a seamless workflow for developers, enhancing productivity.
Bullish investor sentiment
Multiple bullish theses highlight Unity's potential, with notable stock performance and forward-looking optimism.
Innovative feature pipeline
Unity continues to innovate with new releases and features, ensuring compatibility and adding value for users.
A real bull case compounds — each driver matters most when it strengthens margins, supports capital returns, and keeps the company above the market's minimum growth bar simultaneously.
U Stock Price Performance
52-week range context and price returns across multiple time horizons. Dividend contribution is shown separately in the Capital Return section.
Current Price
$27.48
52W Range Position
30%
52-Week Range
Current price plotted between the 52-week low and high.
52-Week Low
$16.78
+63.8% from the low
52-Week High
$52.15
-47.3% from the high
1 Month
+2.54%
3 Month
+39.42%
YTD
-37.9%
1 Year
+14.9%
3Y CAGR
-11.8%
5Y CAGR
-23.5%
10Y CAGR
-8.7%
Range context matters because valuation compression and earnings misses rarely hit from the same starting point. A stock already far below its high can still fall, but it is no longer carrying the same embedded optimism as one pressing a fresh peak.
U vs Peers
Valuation, growth, and margin comparison against the closest publicly traded peers for this company.
Peer Set
Accurate peer set
Forward PE
—
vs 19.5x median
Peer median unavailable
Revenue Growth
+12.5%
vs +11.2% median
+12% above peer median
Net Margin
-35.0%
vs 7.0% median
-602% below peer median
| Company | Mkt Cap | Fwd PE | Rev Grw | Margin | Rating | Upside |
|---|---|---|---|---|---|---|
U U Unity Software Inc. | $12.0B | — | +12.5% | -35.0% | Buy | +24.0% |
EPA EPAM EPAM Systems, Inc. | $4.0B | 5.9x | +6.6% | 7.0% | Buy | +88.7% |
ADS ADSK Autodesk, Inc. | $40.9B | 15.4x | +11.2% | 19.5% | Buy | +63.1% |
TTW TTWO Take-Two Interactive Software, Inc. | $44.4B | 35.6x | +22.2% | -4.5% | Buy | +20.1% |
EA EA Electronic Arts Inc. | $50.6B | 23.5x | +6.7% | 11.8% | Hold | -14.6% |
RBL RBLX Roblox Corporation | $36.9B | — | +35.0% | -20.7% | Buy | +65.2% |
This peer comparison reflects companies with similar business models, product lines, or market positioning, supplemented by industry grouping when direct matches are limited.
FAQ
7 questionsU Investor Questions
Common questions answered from live analyst data and company financials.
01Is Unity Software Inc. (U) stock a buy or sell in 2026?
Unity Software Inc. (U) is rated Buy by Wall Street analysts as of 2026. Of 26 analysts covering the stock, 18 rate it Buy or Strong Buy, 8 rate it Hold, and 0 rate it Sell or Strong Sell. The consensus 12-month price target is $34, implying +24.0% from the current price of $27.
02What is the U stock price target for 2026?
The Wall Street consensus price target for U is $34 based on 26 analyst estimates. The high-end target is $43 (+56.5% from today), and the low-end target is $27 (-1.7%).
03Is Unity Software Inc. (U) stock overvalued in 2026?
Forward earnings data for U is not currently available. Review the valuation table above for trailing P/E, EV/EBITDA, and price-to-sales comparisons against market and sector benchmarks.
04What are the main risks for Unity Software Inc. (U) stock in 2026?
The primary risks for U in 2026 are: (1) Operational missteps — Unity's operational missteps are contributing to financial instability and investor skepticism. (2) Competitive disadvantages — The company faces significant competitive pressures that may erode its market position. (3) Financial engineering concerns — Aggressive financial practices are raising red flags about sustainability and transparency. Each factor has the potential to pressure earnings or compress the stock's valuation multiple.
05What is Unity Software Inc.'s revenue and earnings forecast?
Analyst consensus estimates U will report consensus revenue of $2.2B (+12.5% year-over-year) and EPS of $-1.10 (+29.1% year-over-year) for the upcoming fiscal year. The following year, analysts project $2.4B in revenue.
06When does Unity Software Inc. (U) report its next earnings?
Unity Software Inc. is expected to report its next earnings on approximately 2026-08-05. Consensus expects EPS of $0.24 and revenue of $514M. Over recent quarters, U has beaten EPS estimates 67% of the time.
07How much free cash flow does Unity Software Inc. generate?
Unity Software Inc. (U) generated $463M in free cash flow over the trailing twelve months — a free cash flow margin of 24.1%. U returns capital to shareholders through and share repurchases ($0 TTM).