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Investing.com - Goldman Sachs has initiated coverage on Unity Software (NYSE:U) with a Neutral rating and a price target of $38.00, according to a research note released Tuesday. The target sits between the current analyst range of $18 to $50, with Unity currently trading near $36.58. According to InvestingPro data, the stock has shown strong momentum with a 104% gain over the past six months.
The coverage was assumed by analyst Eric Sheridan from previous analyst Kash Rangan, with the rating remaining unchanged while the price target was raised from the prior $32.50.
Goldman Sachs describes Unity as a global platform that facilitates the creation and monetization of games and other digital experiences, noting that the company is emerging from a period of disruption.
The investment bank expects Unity to reaccelerate topline growth in coming years, driven by anticipated share gains for its Grow segment and stable growth in its core Create segment.
Goldman Sachs indicates that questions remain about how effectively Unity’s Vector AI platform can improve advertiser performance and achieve greater adoption, while also suggesting that the market may have already priced in some of the expected revenue growth reacceleration.
In other recent news, Unity has announced several significant developments. The company has appointed Chris Feo as Senior Vice President of Sales and Partnerships, Programmatic, to lead growth for its Audience Hub offering, which focuses on connecting programmatic advertisers with gaming audiences. Additionally, Unity has formed an AI Council to accelerate innovation, with industry experts Jia Li and Julian Togelius as its initial members. In a related development, Wells Fargo has raised its price target for Unity Software to $29, citing the company’s second-quarter revenue guidance of $440-450 million, which aligns with the consensus estimate. However, this guidance falls slightly short of buy-side expectations at the high end.
Meanwhile, Unity faced a challenge as Meta Platforms announced it would replace Unity with its own runtime engine for app development, following the unveiling of Meta’s new smart glasses. Despite this, Unity continues to focus on growth and innovation, as evidenced by its recent strategic appointments and partnerships.
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