Unity Software Stock More Attractive After Price Increases, Says Bank of America Analyst

Bank of America's Ryan Gee reiterated their Strong Buy rating on Unity Software (NYSE: U). The analyst also maintained a $56 price target.

Gee reminded investors that on September 12, 2023, Unity Software announced changes to its Runtime Fee policy, which resulted in price increases. Despite this, the analyst argued that Unity Software's stock is "more attractive today than on September 11," the day before the announcement. On September 11, the stock closed at $38, which Gee noted was 19% above the current price. Gee also highlighted that Unity Software has "lower projected revenue, a less clear path to monetizing its Create platform, and negative investor sentiment regarding mobile ad market positioning" relative to its competitor, Applovin.

However, the analyst expressed optimism and stated that Unity Software and investors are "better off today than before the price increases." Gee sees the recent selloff as an attractive buying opportunity, especially since the company has announced several refinements to address developers' concerns following the initial price increases.

Currently, 75% of top-rated analysts rate Unity Software as a Strong Buy or Buy, while 25% see it as a Hold. No analysts recommend or strongly recommend selling the stock.

Looking at the stock's performance, since Unity Software's last quarterly report on June 30, 2023, the stock price has decreased by 27.2%. Year-over-year, the stock is down 5.1%. During this period, Unity Software has been trailing the S&P 500, which is down 15.4%.

It's worth noting that Bank of America analyst Ryan Gee is ranked in the bottom 15% out of 4,337 Wall Street analysts by WallStreetZen. Gee has an average return of -4.8% and a 45% win rate. Their specialization includes the Technology, Communication Services, and Consumer Cyclical sectors.

Unity Software Incorporated operates an interactive real-time 3D content platform, allowing the creation and monetization of interactive content for various devices such as mobile phones, tablets, PCs, consoles, augmented reality, and virtual reality devices. The company serves a wide range of customers including content creators, developers, artists, designers, engineers, and architects. Unity Software offers its solutions directly through its online store, field sales operations, independent distributors, and resellers in the U.S. and internationally. The company was founded in 2004 and has its headquarters in San Francisco, California.

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