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Investing.com - Citizens has raised its price target on Unity Software (NYSE:U) to $45.00 from $35.00 while maintaining a Market Outperform rating following the company’s third-quarter performance. The new target sits close to Unity’s current price of $42.36, which has surged 65.91% over the past year. According to InvestingPro data, Unity appears to be trading near its Fair Value estimate.
Unity reported strong 3Q25 results with revenue and EBITDA exceeding the high end of guidance by $20 million (4%) and $15 million (15%), respectively. The revenue beat in the third quarter was larger than the $16 million outperformance in 2Q25. Despite these positive results, InvestingPro data shows Unity is not profitable over the last twelve months, with an EBITDA of -$85.43 million.
The company’s fourth-quarter revenue guidance at the midpoint came in 2.5% above consensus expectations, providing additional confidence in Unity’s growth trajectory.
Citizens noted that Vector appears to be maturing well and translating into strong revenue growth, with Grow revenue increasing 11% quarter-over-quarter. Meanwhile, Create revenue grew 13% year-over-year excluding non-strategic revenue, driven by price increases and improved execution in China.
The investment firm cited high incremental margins and potential catalysts including Unity powering in-app purchases and the growing incorporation of runtime data into ad models as factors supporting the higher price target.
In other recent news, Unity Software reported its third-quarter 2025 earnings, surpassing revenue expectations with $471 million compared to the forecasted $452.76 million. The company’s earnings per share also exceeded projections, coming in at $0.20 against an anticipated $-0.23. These results mark a positive development as both business segments reported organic growth year-over-year for the first time in nearly four years. Morgan Stanley responded to these strong results by raising its price target for Unity Software from $44 to $48, maintaining an Overweight rating on the stock. The company’s quarterly revenue and EBITDA were 5% and 16% above Morgan Stanley’s estimates, respectively. These updates reflect a period of positive momentum for Unity Software, with investors showing optimism following the earnings announcement.
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