William Blair analyst Dylan Becker has maintained their bullish stance on U stock, giving a Buy rating on February 23.
Dylan Becker has given his Buy rating due to a combination of factors, including Unity Software’s recent strategic business review, which is expected to be completed soon. The company reported significant fourth-quarter revenues and adjusted EBITDA, and management has set a new guidance with a positive outlook for 2024. The anticipated completion of the strategic review process allows Unity to refocus on its core platform investments and prioritizing revenue growth initiatives. This foundation is bolstered by strong subscription growth in their core Create segment and a surge in non-gaming industries, which suggests a robust momentum moving forward.
Furthermore, Becker’s optimism is supported by Unity’s potential for sustained margin expansion and an acceleration in revenue growth in the latter half of the year. This trajectory could establish Unity as a Rule-of-40 business by the end of 2024, which is a key performance indicator blending revenue growth and profit margins. Unity’s increased integration of Create and Grow solutions, alongside the company’s shift towards sustainable growth and free cash flow generation, signals a positive long-term outlook. Considering these strategic moves and the dissipation of uncertainty around Unity’s revised business forecast, Becker maintains a bullish stance on the company’s stock.
According to TipRanks, Becker is a 4-star analyst with an average return of 12.6% and a 69.44% success rate. Becker covers the Technology sector, focusing on stocks such as Ansys, Unity Software, and Autodesk.
In another report released on February 23, Wells Fargo also maintained a Buy rating on the stock with a $40.00 price target.
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Unity Software (U) Company Description:
California-based Unity Software Inc. is a video game software development company. The platform provides software solutions to create and monetize interactive, real-time 2D and 3D content for mobile phones, tablets, PCs, consoles, and augmented and virtual reality devices. The products are used in the gaming industry, architecture and construction sector, animation industry, and designing sector.
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