Unity Software Slumps as Losses Clash With Analyst Hype

Unity Software ( (U) ) has fallen by -13.41%. Read on to learn why.

Unity Software shares fell 13.41% over the past week, even as Wall Street analysts continued to warm to the stock. The pullback comes after a strong run and reflects investors’ unease with Unity’s ongoing losses and insider selling, rather than any sudden collapse in the company’s business. Unity’s latest quarter showed revenue rising to about $471 million from $447 million a year earlier, but the company is still posting GAAP net losses of more than $120 million, a combination that makes some shareholders nervous after a big rally.

Analysts, however, remain broadly constructive. Freedom Capital Markets initiated coverage with a Buy rating and a $52 price target, while Morgan Stanley, Wells Fargo, Citi, and others either maintained Buy or Overweight ratings and raised their targets into the high‑40s to mid‑50s. Goldman Sachs also nudged its target higher, citing a better-than-expected environment for mobile and app advertising, where Unity’s ad network is gaining share. Wells Fargo’s channel checks point to double‑digit quarter‑over‑quarter growth in Unity’s ad revenues, helped by its Vector technology, even as its IronSource unit continues to struggle.

Despite the negative weekly price move, the analyst consensus on Unity Software still sits at “Moderate Buy,” with an average target implying upside from recent levels. The tension for investors is clear: on one side, improving fundamentals in Unity’s advertising business and optimism about its role in GenAI and game development; on the other, persistent losses and a wave of insider selling, including a recent multi‑million‑dollar sale by director Tomer Bar‑Zeev. For traders and longer-term investors alike, the coming quarters will be about whether Unity can turn revenue momentum and analyst confidence into a credible path to profitability.