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Unity Software (U) Stock Analysis

This is a peer-relative look at Unity Software (U): its performance, risk, profitability, growth, financial strength, dividend, and valuation are each measured against its Software & Services peers, so every number reads in context rather than in isolation.

Company Profile

Company profile fields for Unity Software (U)
Profile ItemU
NameUnity Software Inc.
Country/RegionUnited States
GICS SectorInformation Technology
GICS Industry GroupSoftware & Services
GICS IndustrySoftware
GICS Sub-IndustryApplication Software
Market Capitalization22.85 billion USD
CurrencyUSD
ExchangeNYSE
Listing DateSeptember 18, 2020
Security TypeCommon Stock

Price Performance

Cumulative Growth

U
GSPC
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Unity Software (U) vs. S&P 500 (GSPC): Growth of a $10,000 investment over the past five years. Adjusted for dividends and splits.

Trailing Returns

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Trailing total returns for Unity Software (U) and S&P 500 (GSPC). Returns over one year are annualized.

Calendar-Year Returns

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Calendar-year total returns for Unity Software (U) and S&P 500 (GSPC). Each bar is that year's total return, measured year-end to year-end.

Performance Metrics

Unity Software (U) metric values compared with Software & Services industry-group medians
MetricCurrent stock: UIndustry group median
Total Return (1Y)30.56%-3.00%
Total Return (3Y, Annualized)27.46%8.28%
Total Return (5Y, Annualized)-21.16%-7.91%

Risk Profile

Drawdown History

U
GSPC
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Unity Software (U) vs. S&P 500 (GSPC): Drawdown from the running peak over the past five years. Each line shows the decline from its prior peak; 0% marks a new high.

Return Distribution

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Distribution of monthly total returns for Unity Software (U) and S&P 500 (GSPC). Each bar is the share of months whose return fell in that 5% bucket.

Risk Metrics

Unity Software (U) metric values compared with Software & Services industry-group medians
MetricCurrent stock: UIndustry group median
Volatility (1Y, Annualized)71.11%61.69%
Beta (5Y)1.971.06
Max Drawdown (5Y)-93.07%-76.52%

Risk-Adjusted Performance

Risk-Return Positioning

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Each dot is a stock plotted by 1-year volatility (risk) and 1-year return. U is highlighted; the dashed line is the Capital Allocation Line from the risk-free rate through the industry median — dots above it are stronger on a risk-adjusted basis.

Risk-Adjusted Metrics

Unity Software (U) metric values compared with Software & Services industry-group medians
MetricCurrent stock: UIndustry group median
Sharpe Ratio (1Y)0.37-0.13
Sortino Ratio (1Y)0.51-0.19

Profitability

ROE (TTM)

Unity Software (U) has negative ROE of -9.66%. That can come from trailing losses or negative book equity, so it is a warning state rather than a clean capital-efficiency measure.

U

Software & Services industry group

-9.66%

Group distribution
Max
53.85%
Q3
17.90%
Median
6.59%
Q1
-9.59%
U
-9.66%
Min
-50.52%
Largest peers
ORCL
41.19%
PLTR
40.91%
IBM
34.77%
MSFT
34.22%
SAP
18.18%
PANW
1.74%
U
-9.66%
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Where Unity Software (U) stands on ROE within its Software & Services peer group — the box is the group’s distribution and the dots its largest members.

Net Margin (TTM)

Unity Software (U) has negative net margin of -15.60%. The trailing period ended in a net loss, so the bottom-line conversion read is a warning rather than a profitability strength.

U

Software & Services industry group

-15.60%

Group distribution
Max
41.17%
Q3
15.28%
Median
4.63%
Q1
-5.42%
U
-15.60%
Min
-33.17%
Largest peers
PLTR
50.34%
MSFT
41.17%
ORCL
26.36%
SAP
20.41%
IBM
15.99%
PANW
2.67%
U
-15.60%
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Where Unity Software (U) stands on net margin within its Software & Services peer group — the box is the group’s distribution and the dots its largest members.

Operating Margin (TTM)

Unity Software (U) turns 16.95% of revenue into operating profit, roughly in line with the peer group’s normal operating margin range. Its core cost structure looks typical for the industry.

U

Software & Services industry group

16.95%

Group distribution
Max
46.89%
Q3
17.64%
U
16.95%
Median
8.73%
Q1
-2.13%
Min
-30.45%
Largest peers
MSFT
49.76%
PLTR
46.89%
ORCL
35.63%
SAP
29.50%
IBM
16.97%
U
16.95%
PANW
5.40%
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Where Unity Software (U) stands on operating margin within its Software & Services peer group — the box is the group’s distribution and the dots its largest members.

Profitability Metrics

Unity Software (U) metric values compared with Software & Services industry-group medians
MetricCurrent stock: UIndustry group median
ROE (TTM)-9.66%6.59%
ROA (TTM)-0.45%2.45%
Net Margin (TTM)-15.60%4.63%
Operating Margin (TTM)16.95%8.73%
Gross Margin (TTM)78.49%70.07%

Growth

Revenue Growth

Unity Software (U) grew revenue 2.01%, in the lower peer quartile. The top line is expanding more slowly than at most peers, which can reflect softer demand, lost share, or weaker pricing.

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Unity Software (U): Revenue Growth across different time periods, set against Software & Services industry-group medians.

EPS Growth

No usable EPS growth is available for Unity Software (U) this period, so the earnings-momentum read is skipped.

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Unity Software (U) doesn't report EPS Growth this period; the bars show the Software & Services industry-group medians on their own.

Growth Metrics

Unity Software (U) metric values compared with Software & Services industry-group medians
MetricCurrent stock: UIndustry group median
Revenue Growth (YoY)2.01%14.22%
Revenue Growth (3Y CAGR)9.96%13.52%
EPS Growth (YoY)--7.85%
EPS Growth (3Y CAGR)--18.19%

Financial Strength

Current Ratio (MRQ)

Unity Software (U) has current ratio of 2.17, in the healthier middle range for its industry. The short-term asset cushion looks balanced relative to peers rather than stretched thin.

U

Software & Services industry group

2.17

Group distribution
Max
5.11
Q3
2.77
U
2.17
Median
1.67
Q1
1.01
Min
0.03
Largest peers
PLTR
7.10
U
2.17
MSFT
1.23
ORCL
1.17
SAP
1.16
PANW
0.87
IBM
0.86
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Where Unity Software (U) stands on current ratio within its Software & Services peer group — the box is the group’s distribution and the dots its largest members.

Debt / Equity (MRQ)

Unity Software (U) has debt-to-equity ratio of 0.66, roughly in line with the peer group’s normal leverage range. Its mix of debt and equity looks typical for the industry.

U

Software & Services industry group

0.66

Group distribution
Max
2.52
Q3
1.13
U
0.66
Median
0.40
Q1
0.07
Min
0.00
Largest peers
ORCL
2.52
IBM
1.85
U
0.66
MSFT
0.28
SAP
0.23
PANW
0.09
PLTR
0.02
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Where Unity Software (U) stands on debt-to-equity ratio within its Software & Services peer group — the box is the group’s distribution and the dots its largest members.

Financial Strength Metrics

Unity Software (U) metric values compared with Software & Services industry-group medians
MetricCurrent stock: UIndustry group median
Current Ratio (MRQ)2.171.67
Debt / Equity (MRQ)0.660.40
Net Debt / EBITDA-0.860.17

Dividends

Dividend Yield (TTM)

Unity Software (U) pays no dividend, leaving dividend yield at 0.00% this period. Shareholders may still receive value through reinvestment or buybacks, but there is no dividend income to compare here.

U

Software & Services industry group

0.00%

Group distribution
U
0.00%
Max
0.00%
Q3
0.00%
Median
0.00%
Q1
0.00%
Min
0.00%
Largest peers
IBM
2.73%
ORCL
1.74%
SAP
1.03%
MSFT
0.69%
U
0.00%
PLTR
0.00%
PANW
0.00%
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Where Unity Software (U) stands on dividend yield within its Software & Services peer group — the box is the group’s distribution and the dots its largest members.

Dividend Payout Ratio (TTM)

Unity Software (U) paid no earnings out as dividends this period, leaving payout ratio at 0.00%. There is no dividend payout to size against earnings.

U

Software & Services industry group

0.00%

Group distribution
U
0.00%
Max
0.00%
Q3
0.00%
Median
0.00%
Q1
0.00%
Min
0.00%
Largest peers
IBM
57.51%
SAP
36.45%
ORCL
31.35%
MSFT
19.00%
U
0.00%
PLTR
0.00%
PANW
0.00%
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Where Unity Software (U) stands on payout ratio within its Software & Services peer group — the box is the group’s distribution and the dots its largest members.

Dividend Metrics

Unity Software (U) metric values compared with Software & Services industry-group medians
MetricCurrent stock: UIndustry group median
Dividend Yield (TTM)0.00%0.00%
Dividend Payout Ratio (TTM)0.00%0.00%

Valuation

P/E Ratio (TTM)

No usable P/E ratio is available for Unity Software (U) this period, so the trailing-earnings valuation read is skipped.

U

Software & Services industry group

--

Group distribution
Max
112.94
Q3
60.32
Median
32.91
Q1
18.77
Min
6.69
U
--
Largest peers
PANW
784.60
PLTR
112.94
SAP
29.07
MSFT
27.69
IBM
20.90
ORCL
18.20
U
--
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Unity Software (U) doesn’t report P/E ratio this period; the box shows the Software & Services group’s distribution and the dots its largest members.

P/S Ratio (TTM)

Unity Software (U) trades at 10.48 on P/S ratio, in the higher sales-valuation quartile. Investors are paying up for each dollar of revenue, so stronger margins, growth, or revenue quality need to carry that price.

U

Software & Services industry group

10.48

Group distribution
Max
17.91
U
10.48
Q3
8.78
Median
4.25
Q1
2.23
Min
0.02
Largest peers
PLTR
53.02
PANW
22.37
MSFT
11.37
U
10.48
SAP
6.84
ORCL
5.04
IBM
3.31
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Where Unity Software (U) stands on P/S ratio within its Software & Services peer group — the box is the group’s distribution and the dots its largest members.

P/B Ratio (MRQ)

Unity Software (U) trades at 7.03 on P/B ratio, roughly in line with the industry’s normal price-to-book range. Its balance sheet is not being priced at a clear discount or premium versus peers.

U

Software & Services industry group

7.03

Group distribution
Max
16.63
Q3
8.50
U
7.03
Median
4.30
Q1
1.92
Min
-3.90
Largest peers
SAP
73.25
PLTR
34.41
PANW
9.30
MSFT
8.38
U
7.03
IBM
6.52
ORCL
5.68
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Where Unity Software (U) stands on P/B ratio within its Software & Services peer group — the box is the group’s distribution and the dots its largest members.

Valuation Metrics

Unity Software (U) metric values compared with Software & Services industry-group medians
MetricCurrent stock: UIndustry group median
P/E Ratio (TTM)--32.91
P/S Ratio (TTM)10.484.25
P/B Ratio (MRQ)7.034.30
Free Cash Flow Yield (TTM)2.76%3.98%