Omar Dessouky, an analyst from Bank of America Securities, reiterated the Sell rating on Unity Software. The associated price target was raised to $18.00.
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Omar Dessouky has given his Sell rating due to a combination of factors influencing Unity Software’s current market position. One of the primary reasons is the significant rise in the stock price, which Dessouky attributes to short covering rather than sustainable growth in UnityAds. Without consistent quarter-over-quarter improvements in UnityAds through the end of 2026, Dessouky anticipates the stock price will fall back to his price objective, suggesting a potential 50% decline from its current level.
Furthermore, Dessouky points out that the recent changes in Unity’s data framework, while offering developers more control over data sharing, are not groundbreaking enough to drive substantial growth. He also highlights that the current valuation of Unity is unrealistic when compared to its peers, particularly given the lack of evidence for significant profitability or growth in its Create segment. Dessouky’s price objective is based on a valuation multiple that aligns with larger online advertising stocks, but he expects Unity’s valuation to eventually align with smaller-scale peers unless there are major positive revisions in growth forecasts.