Down 50% from its IPO price, is now the time for investors on the sidelines to buy Unity Software (U 1.27%)? In this clip from "3 Minute Stocks Updates" on Motley Fool Live, recorded on May 11, Motley Fool contributor Toby Bordelon discusses whether Unity is a buy right now, and what investors should look out for if they're adding its stock to their portfolio.
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Toby Berdelon: Honestly, if I ignore the stock-based comp issue, it looks pretty attractive to me right now. We've got a $10 billion company. It's 50% below its IPO price less than two years ago. From the business potential I see, I think it's fairly attractive right now. My issue, from an investment standpoint, is if I buy this business, how much of that upside that I see am I actually going to get? That's why it's making me hesitate here. I think if you like what you see, that if you see the potential, and you think this is really cool, I think you could actually be a buyer right now at a smaller allocation. But I think you've got to watch that stock-based comp, I think you got to watch those expenses, and I think you want to see some improvement before you commit to a larger stake.