Unity Software Stock Is Moving Up Thursday: What's Going On?

Unity Software Inc U shares are trading higher Thursday after the company reported a top-line beat and issued strong guidance. Multiple analysts are out with updates following the print. 

What Happened: Unity said first-quarter revenue increased 56% year-over-year to $500 million, which beat average analyst estimates of $480.9 million, according to Benzinga Pro.

The company reported a GAAP net loss of $254 million. Adjusted EBITDA came in at $32 million, which was ahead of provided guidance of $7 million to $12 million.

"For the balance of 2023, we expect revenue to grow faster than the markets in which we compete, with steady and meaningful continued progress on profitability," the company said in a letter to shareholders.

Unity sees second-quarter revenue in a range of $510 million to $520 million, versus estimates of $508.46 million. The company expects full-year revenue to be between $2.08 billion and $2.2 billion, versus estimates of $2.13 billion.

Unity also highlighted the decision to cut 8% of its workforce, reduce managerial layers to become more effective and trim the total number of Unity offices over time to concentrate people and teams together.

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Analyst Assessment: 

• Piper Sandler analyst Brent Bracelin reiterated Unity with an Overweight and maintained a $43 price target.
• Barclays analyst Mario Lu maintained Unity with an Equal-Weight and lowered the price target from $32 to $31.
• Needham analyst Bernie McTernan reiterated Unity with a Buy and maintained a $44 price target.
• Credit Suisse analyst Stephen Ju maintained Unity with an Outperform and lowered the price target from $67 to $66.
• Morgan Stanley analyst Matthew Cost maintained Unity with an Equal-Weight and raised the price target from $27.50 to $28.

U Price Action: Unity shares were up 8.91% at $31.30 at the time of publication, per Benzinga Pro.

Photo: Joshua Woroniecki from Pixabay.