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Unity Software stock target cut by Stifel on seasonality outlook

EditorAhmed Abdulazez Abdulkadir
Published 2024-06-10, 08:38 a/m

On Monday, Stifel adjusted its price target on shares of Unity Software (NYSE:U), reducing it to $25 from the previous $30, while continuing to endorse the stock with a Buy rating.

The firm's analyst cited a revised outlook for the company's 2024 EBITDA, noting an anticipated increase in seasonality and a concentration of financial performance in the latter half of the year. Despite this adjustment, the analyst reiterated the full-year EBITDA forecasts for both 2024 and 2025 remain intact.

The revision follows a comprehensive evaluation that led to the updated 2024 EBITDA estimates. Unity Software's financial prospects, particularly in terms of earnings before interest, taxes, depreciation, and amortization (EBITDA), appear to be shifting within the year, prompting this new price target.

The firm also mentioned that Unity Software's Vice President of Finance & Investor Relations, Daniel Amir, participated in Stifel's annual Cross Sector Insight Conference. The insights from this event have been integrated into the firm's analysis and contributed to the decision to maintain the Buy rating despite the price target adjustment.

Stifel's report suggests that the price target reduction to $25 is a reflection of a broader trend of multiple compression affecting the group, indicating a decrease in the valuation multiples investors are willing to pay for companies within the sector. Unity Software's stock price will now be gauged against this new target as the company navigates through the anticipated seasonal variations in its financial performance.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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