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Unity Software Inc. (U)

NYSE - Nasdaq Real-time price. Currency in USD
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147.93-4.41 (-2.90%)
As of 09:53AM EST. Market open.
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  • R
    Robert
    I don’t think I’ve seen a good company so oversold. Omicron is not going to be much of a big deal if vaccinations continue apace. An interest rate hike to 1.5-2% is not that big of a deal; growth companies have matured just fine with those kinds of rates in the past (Amazon, anyone?). This does open a buying opportunity for those who missed the earlier run-up, but Unity is still a fundamentally sound growth company. I’d get in here if I weren’t already.
  • y
    yegal
    Does anyone know why the drop ????
  • d
    ddime
    bought 150 today..
  • S
    Snow Crash
    I bought the deep today, not sure if its the end of it but it doesn’t really matter it’s a good price anyway.
  • E
    Ernesto
    Nice fear, uncertainty and doubt in market :D Fundamentally omicron variant is only good news for Unity's business model as people spend more time in mobile. I wouldn't be surprised to see Unity and Nasdaq index on ATH at the end of the year
  • J
    Jack Georges
    Today is a gift. Buy more U if you believe in the metaverse! Bargain pricing
  • e
    eric
    Starting my position with U now ! I'm comfortable with this price. Will start accumulating !
  • O
    Ofu
    Posted this analysis a while back but now that Unity is starting to get a lot more attention I thought I would post this again. Excuse some of the outdated information.
    ----------------------
    Here is some analysis on U stock. Really basic but just some assumptions:
    Assumptions:
    Unity Revenue FY2021 = 1 Billion
    Shares Outstanding increase by 93% to 550 Million by 2030. I believe this is fair because only about five million or approximately 7% of shares have been added since they went public. (According to YCharts)

    Bear Case:
    Unity Revenue Growth = 20% over 9 years to 2030 which is cumulative growth of 416% (1.2^9=5.16)
    Unity FY2030 = 5.16 Billion
    Profit Margin = 0.2; This takes into account that RnD expenses cut in half and SGA stay the same as a percentage of revenue.
    Unity Profit = 1.03 Billion
    Unity Earnings (After Tax of 20%) = 825 Million
    Unity EPS = 1.5
    Unity PE = 60; Given the company will still have revenue growth in the high teens in this assumption and a major portion of their profit is being consumed by RnD that can be railed in, I believe this is fair.

    Unity Price Per Share = A measly 90 dollar pps in 10 years?!?! I don't know if I did something wrong. Revenue growth hitting this low would be absurd though.

    Base Case:
    Unity Revenue Growth = 30% over 9 years to 2030 which is cumulative growth of 960% (1.3^9=10.6). This is in line with management guidance.
    Unity FY2030 = 10.6 Billion
    Profit Margin = 0.2; This takes into account that RnD expenses cut in half and SGA stay the same as a percentage of revenue.
    Unity Profit = 2.12 Billion
    Unity Earnings (After Tax of 20%) = 1.7 Billion
    Unity EPS = 3.09
    Unity PE = 100; Given the company will still have revenue growth in the high twenties in this assumption and a major portion of their profit is being consumed by RnD that can be railed in, I believe this is fair.

    Unity Price Per Share = 309 dollars.

    Bull Case:
    Unity Revenue Growth = 40% over 9 years to 2030 which is cumulative growth of 1960% (1.4^9=20.66).
    Unity FY2030 = 20.66 Billion
    Profit Margin = 0.4; This takes into account that RnD decrease significantly to near zero and SGA decrease by as a percentage of revenue. This margin is similar to that of Autodesk.
    Unity Profit = 8.26 Billion
    Unity Earnings (After Tax of 20%) = 6.11 Billion
    Unity EPS = 12.02
    Unity PE = 100; Given the company will still have revenue growth in the high thirties, I believe this is fair.

    Unity Price Per Share = A 1202 dollars. Basically a 10x.

    The tricky part about valuing Unity is their RnD expenses which eat into their profits. Unity as of now is a profitable company but it appears that they must cut into their revenue to drive growth. Another thing is revenue growth which changes their FY2030 revenues significantly. Last year it was 43% and this year management is aiming for 31%. Also, I don't know what their SGA costs are being allocated to and therefore may not have properly gauged their profitability, but it has increased with revenue closely. I also may have been too conservative on PE ratios and the company may be valued as if they had higher profit margins as the RnD can be railed in.

    IMO I think the share price will be somewhere between my base and bull case.

    If you actually read this, what are your thoughts on how things could differ? Serious answers only please.
  • R
    Ryan
    There’s no COVID in the metaverse or in mobile games
  • a
    aabb
    U + AABB before crypto Exchange launch +ALPP with new manuf acquisition.
  • D
    Dexter
    Cathie dumping?
  • B
    Benjo
    Heading to $100 again !
  • N
    Nick_O_6527
    So strange, up first hour then crash everyday for the past week or so. It’s very odd.
  • w
    waterman
    Like I said before, U still trending downward towards $150.
  • S
    Stockguru
    Once all the panic sellers are done this will go back up. I am just adding a few shares on every 25 point drop
  • a
    aldous
    Maybe, we should all just invest in MSFT, AAPL, NFLX, FB, GOOG, TSLA , NVDA, AMD and AMZN...Forget about the rest of the market
  • D
    David
    I want to invest, everything i have read is that the software is legit and very user friendly, how far do we think this can fall? I am also a long term investor so I just want to get in at a good price
  • s
    steven
    What’s the news we don’t know?
  • S
    SG
    Auntie Cathie is still selling.....
  • J
    Juan
    Cathie Wood sold 34,000 shares of U today. She plans on unloading the last 6 million she owns