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Investing.com - Oppenheimer has reiterated its Perform rating on Unity Software (NYSE:U) following the company’s better-than-expected third-quarter 2025 financial results. The stock surged 17.24% in the past week, with shares now trading at $42.36, approaching its 52-week high of $46.94, according to InvestingPro data.
Unity reported revenue of $471 million and EBITDA of $109 million for the third quarter, surpassing FactSet consensus estimates of $450 million and $95 million, respectively.
According to Oppenheimer, the outperformance was primarily driven by quarter-over-quarter acceleration in Vector, with UnityAds/Vector growing an estimated 19% quarter-over-quarter, up from 15% in the second quarter and exceeding third-quarter guidance of 10%.
The firm noted that Unity’s Create segment maintained strong double-digit year-over-year growth for subscription revenue due to rising average revenue per user, while the non-Vector portfolio in the Grow segment showed moderate improvement quarter-over-quarter.
For the fourth quarter, Unity management has maintained what Oppenheimer describes as conservative guidance, projecting high single-digit year-over-year growth for Create (compared to 13% in Q3) and mid-single-digit quarter-over-quarter growth for Grow (versus 11% in Q3). Despite impressive 95.48% price returns over the past year, InvestingPro analysis indicates Unity appears overvalued at current levels, with analysts setting targets between $18-$50. InvestingPro offers 8 additional insights on Unity, including its financial health score of GOOD, in its comprehensive Pro Research Report.
In other recent news, Unity Software reported impressive third-quarter 2025 earnings, surpassing revenue expectations with a total of $471 million, compared to the forecasted $452.76 million. The company also achieved an earnings per share of $0.20, significantly exceeding the anticipated $-0.23. Following these results, several analyst firms adjusted their price targets for Unity Software. Needham raised its target to $50, maintaining a Buy rating, citing confidence in the company’s growth trajectory. Goldman Sachs increased its target to $42, keeping a Neutral rating, driven by strong revenue growth and a positive outlook for the Create and Grow segments. Citizens lifted its target to $45, highlighting Unity’s revenue and EBITDA exceeding guidance by $20 million and $15 million, respectively. Morgan Stanley also raised its target to $48, noting positive organic growth in both business segments for the first time in nearly four years. These developments reflect a growing confidence among analysts in Unity Software’s financial performance and future prospects.
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