· The price of U went up after the announcement regarding A.I. was made.
· The company has reported revenues but it is going past 0 after the operating profit levels
· The price is seen close to taking the support of the 50 EMA but MACD and RSI gave a sell signal.
Unity Software Inc founded in 2004, is an American company listed on NYSE, which is engaged in the business of developing video gaming software for creating and running 3D and 2D games and apps for devices like Mobile phones, consoles, tablets, etc. The company is led by CEO John Riccitiello with over 7.7k employees.
Brief Financials and Key Performance Ratios
· The revenue of Unity for the quarter that ended in March 2023 was $500 Million which is a 56% increase year-on year.
· The operating profit for the company came as negative with a value of -$255M, as the company has made major expenditures on marketing.
· The net profit of Unity came to -$253 Million.
· The gross margin of unity as per Trailing twelve months (TTM) is 67.5%.
· The operating margin of UNITY is -$61.4%.
· The Company has a net negative margin of -63.4%.
· The company has a low debt to equity ratio as 0.78.
· The earnings per share of the company is -$0.67 because of the net loss. Therefore, the PE is negative.
The Metrics have been calculated by financial statements, provided by macrotrends.net
Unity Stock Previous Price Action and Forecasting
The price of UNITY was at an all-time high in November 2021 with a value of $201
The 52-week high price is $58 which is 45% more than the current price of $40. The 52-week low price of U is $21.2. With all the ups and downs, the average 52-week price is $34.
Following the announcement of the company’s belief in the potential of A.I., there has been a substantial increase in the stock prices.
Support Levels: The recent resistance turned into a new support at $32.6, accompanied by significant trading volumes. A secondary support is evident at the price level of $24.3.
Resistance Levels: The immediate resistance stands at $49, established from a candle in August 2022. A second resistance point is identified at $58.41, indicating a potential level where the price might face upward resistance.
Indicators
The MACD indicator points towards a bearish market trend as the signal line crossed over the MACD line on July 21, 2023, suggesting weaker moving averages.
The RSI has shown weakness after reaching a peak of 68, currently standing at 42.9. This decline in RSI indicates a potential decrease in buying momentum.
In terms of Exponential Moving Averages (EMAs), the 50 EMA has recently crossed over the 200 EMA on July 18, 2023. This crossover suggests a short to medium-term uptrend. The current levels are 50 EMA at $40.25, closely followed by the 200 EMA at $38.8.
Is Unity Stock Worth Buying Right Now?
From an investor’s perspective, the prolonged downtrend of Unity’s stock price, coupled with the company’s reporting of net losses and negative key ratios such as ROE, PE, and EPS, raises concerns. These negative financial indicators could serve as a cautionary signal for potential investors, highlighting potential risks associated with investing in the stock.
However, from a trader’s viewpoint, the current price level of Unity presents an opportunity. If the price finds support at the 50EMA and rebounds, it could potentially reach the first resistance at $49. On the flip side, if bearish sentiment takes control, as indicated by the MACD and RSI indicators, the price might decline towards the support level of $32.69.
Conclusion
Founded in 2004, Unity Software is an established American gaming software development company. In its most recent quarter, the company reported a revenue of $500 million, accompanied by a net loss. The stock price’s movement is now closely tied to its 50 EMA, where it might find support. However, if this support does not hold, a potential short-term decline could be anticipated.
Technicals
Support: $32.6, $24.38
Resistance: $49.32, $58.41
RSI: 42.9
50 EMA: $40.25
100 EMA: $38.81
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.
