📖 Unity classes itself as a world leading platform for creating and operating interactive real-time 3D content, mostly in the video game space. Unity grew its revenue 39% year over year in Q4 to $220 million, and free cash flow improved to positive $3.6 million compared to negative $9.7 million for the same period a year ago. The company now has 793 customers spending over $100,000 with Unity over the last year, compared with just 600 in 2019 (Motley Fool). Unity now has no debt and forecasts 23% revenue growth over the next year. Despite this, the earning report mentioned that Apple’s privacy updates - which will prompt Apple device uses if they want to opt out of application tracking activity - would result in a $30 million revenue reduction.
UArk has almost doubled its position size in Unity after the disappointing earnings, taking its ownership of shares from 2.4 million to 4.7 million today - it spent $177 million to achieve this. In addition to this, analysts at Berenberg marinated a buy rating for Unity and raised the price target from $106 to $165 noting that “the mobile gaming opportunity is still nascent and Unity has other markets outside of gaming that will provide incremental growth.” Median price targets see the stock at $1150 and high forecasts see $175.
📈Shares in Unity dropped by 30% from its all time highs in trading on Friday of last week. Despite this, price seems to have bottomed out with a number of failed attempts to break the $124, suggesting the bearish volume may be becoming exhausted. Price is also looks to be supported by a bullish price channel, however this interpretation is subjective. Short term, the price is still bearish, trading in a bearish price channel. With this being said, current price could be an area of bullish confluence - bottoming price action and support of both the bullish and bearish price channels - which could move the price higher (see area highlighted in the blue square). A conservative trade might be a gap fill of the earning dip which would see about 14% upside. A return to the $165 level though would see a +30% move.
🔎This is not financial advice. Always do your own research and due diligence. Always wait for directional confirmation before entering a trade.
UArk has almost doubled its position size in Unity after the disappointing earnings, taking its ownership of shares from 2.4 million to 4.7 million today - it spent $177 million to achieve this. In addition to this, analysts at Berenberg marinated a buy rating for Unity and raised the price target from $106 to $165 noting that “the mobile gaming opportunity is still nascent and Unity has other markets outside of gaming that will provide incremental growth.” Median price targets see the stock at $1150 and high forecasts see $175. 📈Shares in Unity dropped by 30% from its all time highs in trading on Friday of last week. Despite this, price seems to have bottomed out with a number of failed attempts to break the $124, suggesting the bearish volume may be becoming exhausted. Price is also looks to be supported by a bullish price channel, however this interpretation is subjective. Short term, the price is still bearish, trading in a bearish price channel. With this being said, current price could be an area of bullish confluence - bottoming price action and support of both the bullish and bearish price channels - which could move the price higher (see area highlighted in the blue square). A conservative trade might be a gap fill of the earning dip which would see about 14% upside. A return to the $165 level though would see a +30% move.
🔎This is not financial advice. Always do your own research and due diligence. Always wait for directional confirmation before entering a trade.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.