r/stocks Mar 16, 04:07 PM
What's the bear case with Unity (U)? I don't own any Unity stock but I'm looking into buying some, however everyone seems to be rating the stock as very bearish.
I've been an engineer and game developer for over 12 years, so I know the product in and out. I also explore AI constantly so I'm really up to date with new tools.
What I know right now: 1. Unity definitely took a hit after the whole runtime fee fiasco, but the new leadership definitely looks better than before 2. Google's project Genie made all gaming stocks take a dive. However Unity, analysts and my own personal research indicate that this is not really intended to be a full on product. As this Motley Fool article says, "Genie generates environments from prompts but doesn't deploy, optimize, monetize, or distribute games across platforms - Unity does all four" 3. Unity gets paid for people using their editor, so they get paid regardless of games being successful or not. While the 1M revenue threshold before being forced to pay keeps the engine free for small developers getting into the platform. 4. Realistically, Godot is still behind, and Unreal is almost non existent for mobile, the platform that generates the most revenue.
Financials: 1. EPS growth is 30% 2. "The stock has faced a 57.03% share price decline over three months despite revenue growth. Analysts suggest the stock is undervalued at $19.43, with a fair value estimate between $38.48 and $52.65." 3. "Unity Software is in a solid financial position with positive cash flow and no immediate liquidity needs."
With all that said and the stock being near it's all time low, I don't get why this is not rated as a strong buy. I feel like I've convinced myself while writing this, but perhaps I'm missing something?
submitted by /u/Zeitzen
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