Wells Fargo analyst Brian Fitzgerald has maintained their bullish stance on U stock, giving a Buy rating yesterday.
Brian Fitzgerald has given his Buy rating due to a combination of factors related to Unity Software’s strategic moves and financial performance. He recognizes Unity’s near completion of its first phase of restructuring, which includes exiting non-core businesses and rationalizing the cost base, and anticipates the second phase focused on growth to commence in the second half of the year. Fitzgerald appreciates the conservative guidance for FY24 provided by Unity, which minimizes the potential for negative surprises. He also points to the strong growth in core subscriptions outside of China, with particular strength in the Industries segment outpacing Gaming, and the successful growth of gaming subscriptions despite recent challenges.
The report also highlights several proof points for optimism, such as Unity’s Industry SKU being the fastest-growing in the company’s history, and partnerships with high-profile companies like Walmart and Mercedes-Benz. In the gaming sector, Unity’s technology underpins a significant portion of top mobile games, and upcoming product launches and partnerships are expected to drive further innovation. While there are concerns about competition and market share loss, Fitzgerald believes that Unity’s strategic refocus on core businesses and innovation, along with improved financials, supports a positive outlook for the company’s growth and profitability, warranting a Buy rating with a price target of $36.
According to TipRanks, Fitzgerald is a 5-star analyst with an average return of 12.4% and a 54.42% success rate. Fitzgerald covers the Communication Services sector, focusing on stocks such as Take-Two, Electronic Arts, and Criteo SA.
In another report released yesterday, Stifel Nicolaus also maintained a Buy rating on the stock with a $32.00 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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