Unity stock ‘remains expensive,’ says Macquarie

Macquarie says Unity reported an “optical Q4 revenue and EBITDA beat,” but “a sharp miss” when excluding one-time items. In addition, despite cutting $250M in costs, Unity’s FY24 adjusted EBITDA guidance of $400M-$425M implies a year-end exit at about half the prior guidance, or about a roughly 33% cut to FY24 adjusted EBITDA in dollar terms versus the firm’s estimates. Steps being taken should help stabilize the business and re-start growth, but fundamental changes like this take time to work through and the stock “remains expensive” even at after-hours trading below $27 per share, says the analyst, who keeps an Underperform rating and $20 price target on Unity shares.