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Unity Software Inc. (U) Registers a Bigger Fall Than the Market: Important Facts to Note

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Unity Software Inc. (U - Free Report) closed the most recent trading day at $26, moving -0.69% from the previous trading session. The stock trailed the S&P 500, which registered a daily loss of 0.29%. Elsewhere, the Dow lost 0.35%, while the tech-heavy Nasdaq lost 0.3%.

Heading into today, shares of the company had lost 25.01% over the past month, lagging the Computer and Technology sector's gain of 3.61% and the S&P 500's gain of 4.42% in that time.

The upcoming earnings release of Unity Software Inc. will be of great interest to investors. It is anticipated that the company will report an EPS of $0.05, marking a 16.67% fall compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $422.53 million, reflecting a 15.55% fall from the equivalent quarter last year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $0.61 per share and revenue of $1.79 billion, indicating changes of +48.78% and -18.12%, respectively, compared to the previous year.

Investors might also notice recent changes to analyst estimates for Unity Software Inc. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, there's been a 22.22% fall in the Zacks Consensus EPS estimate. Unity Software Inc. is holding a Zacks Rank of #3 (Hold) right now.

In the context of valuation, Unity Software Inc. is at present trading with a Forward P/E ratio of 42.8. This valuation marks a premium compared to its industry's average Forward P/E of 30.85.

Also, we should mention that U has a PEG ratio of 1.65. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. By the end of yesterday's trading, the Internet - Software industry had an average PEG ratio of 1.82.

The Internet - Software industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 43, placing it within the top 18% of over 250 industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.


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