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UNITY SOFTWARE INC (U) Stock Fundamental Analysis

NYSE:U - New York Stock Exchange, Inc. - US91332U1016 - Common Stock - Currency: USD

28.34  +0.34 (+1.21%)

After market: 28.05 -0.29 (-1.02%)

Fundamental Rating

2

Taking everything into account, U scores 2 out of 10 in our fundamental rating. U was compared to 284 industry peers in the Software industry. The financial health of U is average, but there are quite some concerns on its profitability. U does not seem to be growing, but still is valued expensively.


Dividend Valuation Growth Profitability Health

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1

1. Profitability

1.1 Basic Checks

In the past year U has reported negative net income.
In the past year U had a positive cash flow from operations.
In the past 5 years U always reported negative net income.
The reported operating cash flow has been mixed in the past 5 years: U reported negative operating cash flow in multiple years.
U Yearly Net Income VS EBIT VS OCF VS FCFU Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2018 2019 2020 2021 2022 2023 0 200M -200M -400M -600M -800M

1.2 Ratios

U has a Return On Assets of -11.81%. This is in the lower half of the industry: U underperforms 62.32% of its industry peers.
U's Return On Equity of -24.94% is in line compared to the rest of the industry. U outperforms 40.22% of its industry peers.
Industry RankSector Rank
ROA -11.81%
ROE -24.94%
ROIC N/A
ROA(3y)-11.37%
ROA(5y)-16.1%
ROE(3y)-24.73%
ROE(5y)-31.49%
ROIC(3y)N/A
ROIC(5y)N/A
U Yearly ROA, ROE, ROICU Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2018 2019 2020 2021 2022 2023 -20 -40 -60

1.3 Margins

The Gross Margin of U (68.10%) is comparable to the rest of the industry.
U's Gross Margin has declined in the last couple of years.
The Profit Margin and Operating Margin are not available for U so they could not be analyzed.
Industry RankSector Rank
OM N/A
PM (TTM) N/A
GM 68.1%
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-5.07%
GM growth 5Y-3.31%
U Yearly Profit, Operating, Gross MarginsU Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2018 2019 2020 2021 2022 2023 0 50 -50

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4

2. Health

2.1 Basic Checks

U does not have a ROIC to compare to the WACC, probably because it is not profitable.
U has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
U Yearly Shares OutstandingU Yearly Shares OutstandingYearly Shares Outstanding 2018 2019 2020 2021 2022 2023 100M 200M 300M
U Yearly Total Debt VS Total AssetsU Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2018 2019 2020 2021 2022 2023 2B 4B 6B

2.2 Solvency

Based on the Altman-Z score of 1.23, we must say that U is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.23, U is doing worse than 62.32% of the companies in the same industry.
The Debt to FCF ratio of U is 9.81, which is on the high side as it means it would take U, 9.81 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 9.81, U perfoms like the industry average, outperforming 48.55% of the companies in the same industry.
A Debt/Equity ratio of 0.70 indicates that U is somewhat dependend on debt financing.
U has a worse Debt to Equity ratio (0.70) than 71.01% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.7
Debt/FCF 9.81
Altman-Z 1.23
ROIC/WACCN/A
WACC12.93%
U Yearly LT Debt VS Equity VS FCFU Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2018 2019 2020 2021 2022 2023 0 1B 2B 3B

2.3 Liquidity

U has a Current Ratio of 2.41. This indicates that U is financially healthy and has no problem in meeting its short term obligations.
U has a Current ratio of 2.41. This is in the better half of the industry: U outperforms 66.30% of its industry peers.
A Quick Ratio of 2.41 indicates that U has no problem at all paying its short term obligations.
The Quick ratio of U (2.41) is better than 68.48% of its industry peers.
Industry RankSector Rank
Current Ratio 2.41
Quick Ratio 2.41
U Yearly Current Assets VS Current LiabilitesU Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2018 2019 2020 2021 2022 2023 500M 1B 1.5B 2B

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3

3. Growth

3.1 Past

The earnings per share for U have decreased strongly by -5700.00% in the last year.
EPS 1Y (TTM)-5700%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%54.55%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%-24.98%

3.2 Future

Based on estimates for the next years, U will show a very strong growth in Earnings Per Share. The EPS will grow by 32.49% on average per year.
Based on estimates for the next years, U will show a very strong growth in Revenue. The Revenue will grow by 32.97% on average per year.
EPS Next Y31.39%
EPS Next 2Y20.1%
EPS Next 3Y27.38%
EPS Next 5Y32.49%
Revenue Next Year0.93%
Revenue Next 2Y4.3%
Revenue Next 3Y4.68%
Revenue Next 5Y32.97%

3.3 Evolution

U Yearly Revenue VS EstimatesU Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2B 4B 6B 8B
U Yearly EPS VS EstimatesU Yearly EPS VS EstimatesYearly EPS VS Estimates 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 0 2 4

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2

4. Valuation

4.1 Price/Earnings Ratio

U reported negative earnings for the last year, which makes the Price/Earnings Ratio negative.
Also next year U is expected to report negative earnings again, which makes the also the Forward Price/Earnings Ratio negative.
Industry RankSector Rank
PE N/A
Fwd PE N/A
U Price Earnings VS Forward Price EarningsU Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 0 20 -20 40

4.2 Price Multiples

Based on the Price/Free Cash Flow ratio, U is valued a bit cheaper than the industry average as 62.32% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF 50.03
EV/EBITDA N/A
U Per share dataU EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 2 -2 4 6

4.3 Compensation for Growth

A more expensive valuation may be justified as U's earnings are expected to grow with 27.38% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y20.1%
EPS Next 3Y27.38%

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0

5. Dividend

5.1 Amount

U does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A

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UNITY SOFTWARE INC

NYSE:U (2/21/2025, 8:04:00 PM)

After market: 28.05 -0.29 (-1.02%)

28.34

+0.34 (+1.21%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)02-20 2025-02-20/bmo
Earnings (Next)05-07 2025-05-07/amc
Inst Owners63.05%
Inst Owner Change2.11%
Ins Owners4.94%
Ins Owner Change4.41%
Market Cap11.42B
Analysts72.57
Price Target22.94 (-19.05%)
Short Float %7.28%
Short Ratio2.56
Dividend
Industry RankSector Rank
Dividend Yield N/A
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)20.29%
Min EPS beat(2)15.85%
Max EPS beat(2)24.73%
EPS beat(4)2
Avg EPS beat(4)-2.41%
Min EPS beat(4)-32.59%
Max EPS beat(4)24.73%
EPS beat(8)5
Avg EPS beat(8)81.59%
EPS beat(12)9
Avg EPS beat(12)59.19%
EPS beat(16)13
Avg EPS beat(16)53.7%
Revenue beat(2)2
Avg Revenue beat(2)0.97%
Min Revenue beat(2)0.23%
Max Revenue beat(2)1.72%
Revenue beat(4)4
Avg Revenue beat(4)2.88%
Min Revenue beat(4)0.23%
Max Revenue beat(4)4.98%
Revenue beat(8)7
Avg Revenue beat(8)1.47%
Revenue beat(12)8
Avg Revenue beat(12)0.83%
Revenue beat(16)12
Avg Revenue beat(16)2.37%
PT rev (1m)1.44%
PT rev (3m)6.58%
EPS NQ rev (1m)-1.64%
EPS NQ rev (3m)6.5%
EPS NY rev (1m)-0.11%
EPS NY rev (3m)4.77%
Revenue NQ rev (1m)0.34%
Revenue NQ rev (3m)0.7%
Revenue NY rev (1m)0.05%
Revenue NY rev (3m)0.89%
Valuation
Industry RankSector Rank
PE N/A
Fwd PE N/A
P/S 5.81
P/FCF 50.03
P/OCF 41.44
P/B 3.59
P/tB N/A
EV/EBITDA N/A
EPS(TTM)-1.68
EYN/A
EPS(NY)-1.15
Fwd EYN/A
FCF(TTM)0.57
FCFY2%
OCF(TTM)0.68
OCFY2.41%
SpS4.88
BVpS7.9
TBVpS-2.82
PEG (NY)N/A
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA -11.81%
ROE -24.94%
ROCE N/A
ROIC N/A
ROICexc N/A
ROICexgc N/A
OM N/A
PM (TTM) N/A
GM 68.1%
FCFM 11.61%
ROA(3y)-11.37%
ROA(5y)-16.1%
ROE(3y)-24.73%
ROE(5y)-31.49%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-5.07%
GM growth 5Y-3.31%
F-Score5
Asset Turnover0.29
Health
Industry RankSector Rank
Debt/Equity 0.7
Debt/FCF 9.81
Debt/EBITDA N/A
Cap/Depr 8.79%
Cap/Sales 2.41%
Interest Coverage N/A
Cash Conversion N/A
Profit Quality N/A
Current Ratio 2.41
Quick Ratio 2.41
Altman-Z 1.23
F-Score5
WACC12.93%
ROIC/WACCN/A
Cap/Depr(3y)33.96%
Cap/Depr(5y)56.8%
Cap/Sales(3y)3.48%
Cap/Sales(5y)4.15%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-5700%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%54.55%
EPS Next Y31.39%
EPS Next 2Y20.1%
EPS Next 3Y27.38%
EPS Next 5Y32.49%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%-24.98%
Revenue Next Year0.93%
Revenue Next 2Y4.3%
Revenue Next 3Y4.68%
Revenue Next 5Y32.97%
EBIT growth 1Y-9.3%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year147.72%
EBIT Next 3Y37.54%
EBIT Next 5Y22.41%
FCF growth 1Y315.06%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y652.03%
OCF growth 3Y127.59%
OCF growth 5YN/A