Wedbush maintains Outperform rating on Unity Software, $55 price target

Unity (U) and PvX partnered to offer user acquisition financing to growth-stage studios in Unity’s ecosystem. PvX committed $1.3B for this initiative, supporting mobile game and app developers. The program provides financing based on cohort performance, avoiding equity dilution. Qualified developers gain access to Unity Ads credits, enhanced support, and favorable invoicing terms.

Wedbush raised its price target for Unity Software Inc. to $55 from $50, citing growing adoption of its Vector advertising platform. The broker expects Unity to report Q3 revenue of $567M and adjusted EBITDA of $187M, with strategic growth revenue forecasted at $385M. Wedbush anticipates Vector's contribution to become more visible in Q4 results and throughout 2027, while noting AppLovin's MAX platform as a risk.

Wells Fargo maintained an Overweight rating on Unity Software (U) and raised its price target to $53 from $48. GuruFocus values U at $26.59, suggesting a 76.3% overvaluation. The company has a GF Score of 65, indicating moderate financial health and growth potential. Insiders sold $4.88M in shares over the past three months.

Unity Software (NYSE:U) stock rose 5.15% on Friday, supported by analyst upgrades and a partnership with Alphabet's Google. Analysts cited strong performance in Unity's Grow business and the Google deal, which combines AI and consumer reach. Price targets were raised to $53-$54 by Jefferies, Raymond James, and BTIG. The stock is trading above key moving averages, with resistance at $48.50 and support at $40.

Alphabet (GOOGL) and Unity (U) have formed a partnership to enhance game development using generative AI. Unity reported positive Q2 earnings of $0.28 per share, beating estimates, with revenue up 24% YoY. Analysts project 96% earnings growth. The deal helps Unity avoid infrastructure costs while Alphabet leverages its cloud. Roblox (RBLX), facing financial strain, may be threatened by this alliance, with insider sales noted before the announcement.

A San Francisco judge denied AppLovin's request to halt Unity's Ad Quality SDK, sending the case to arbitration. AppLovin alleges Unity's tool collects its proprietary ad auction data, violating contracts and misappropriating trade secrets. AppLovin shares fell over 5% on the news, while Unity's stock showed no significant reaction. The dispute highlights tensions between the two mobile gaming infrastructure companies.