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Investing.com - JMP Securities has raised its price target on Unity Software (NYSE:U) to $35 from $30 while maintaining a Market Outperform rating following the company’s second-quarter 2025 results. The stock, currently trading at $31.92, has shown remarkable momentum with a 129% return over the past year, according to InvestingPro data.
Unity Software reported revenue and EBITDA that exceeded the high end of guidance by $15.9 million (4%) and $15.5 million (20%), respectively. With annual revenue of $1.79 billion and an impressive 74.8% gross margin, the company’s third-quarter 2025 revenue and EBITDA guidance bracketed consensus expectations, which JMP expects will prove conservative.
Unity’s advertising business showed positive momentum with Unity Ad revenue growing 15% quarter-over-quarter. Management expects double-digit gains to continue in the third quarter, driven by month-over-month performance improvements throughout the second quarter.
JMP noted that Vector, Unity’s advertising solution, represents an inflection point for the company’s financial profile. Management indicated that Vector is modular and that its performance improvements could potentially be applied to non-Unity Ads products.
The integration of data into Vector is not expected to impact results until 2026, leaving questions about whether Unity Ads can grow significantly ahead of the industry despite its improving health. InvestingPro subscribers can access 12 additional key insights and comprehensive financial metrics to better evaluate Unity’s growth potential.
In other recent news, Unity Software reported stronger-than-expected financial results for the second quarter of 2025. The company achieved an earnings per share (EPS) of $0.18, surpassing the forecasted $0.13 by 38.46%. Additionally, Unity’s revenue reached $441 million, exceeding expectations by $14.2 million. Following these results, research firms have adjusted their outlooks on Unity. Needham raised its price target for Unity Software to $40 from $30, maintaining a Buy rating, citing the company’s strategic position in the mobile gaming ecosystem. Similarly, Jefferies increased its price target to $40 from $35, also maintaining a Buy rating, due to growth in Unity Ads, which saw a 15% increase quarter-over-quarter. Unity Ads now accounts for 49% of the company’s Grow segment, indicating significant momentum in its Vector platform. These developments highlight Unity Software’s strong performance and positive reception from analysts.
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