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Unity Software Upcoming Earnings -- What to Keep an Eye On

By Jose Najarro – Aug 9, 2021 at 11:00AM

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Even if Unity reports strong earnings, will it be enough to move the stock price?

Unity Software (U -0.81%) is scheduled to report its second-quarter earnings on August 10, 2021, after the market closes. In today's video I look at recent news and share some metrics that Unity investors should watch for in the upcoming earnings. Here are some highlights from the video. 

  1. Investors should watch for the growth of customers outside of gaming. Unity continues to develop its real-time 3D technology, bringing new customers outside of gaming to its platform. This market is still in the early stages for Unity but can provide substantial growth in the future.
  2. For the second quarter, Unity expects revenue of $242.5 million at the midpoint, reflecting roughly 32% year-over-year growth. The average revenue estimate among numerous Wall Street analysts is similar.
  3. Unity Software's forward price-to-sales ratio is at roughly 23. Investors might consider this a high valuation, but as noted before, Unity is a high-growth company. The risk with high valuation is high expectations, and Unity stock price could see an adverse reaction to its stock price if revenue values and future guidance are not reflective of its high growth.

Click the video below for my full thoughts and analysis. 

*Stock prices used were the premarket prices of August 9, 2021. The video was published on August 9, 2021.

Jose Najarro owns shares of Unity Software Inc. The Motley Fool owns shares of and recommends Unity Software Inc. The Motley Fool has a disclosure policy. Jose is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

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