Here's Why Unity Software's Crash Will Make You Money
Software stocks that trade at high valuations have been hit the hardest in this bear market, so Unity Software's (NYSE: U) recent collapse can mostly be attributed to the broader market sell-off. The company entered 2022 with strong momentum across its business, but investors have turned a cold shoulder to Unity after its disappointing outlook in the last earnings report in May.
Two analysts recently downgraded the stock. An analyst with Benchmark went so far as to issue a sell rating. This comes after Unity lowered its second-quarter revenue guidance after experiencing some problems related to its Audience Pinpointer monetization tool for mobile app developers. Management expects revenue growth to decelerate to between 6% and 8% in the second quarter, which is well below what investors are used to with this fast-growing business.
I believe Unity stock is a bargain right now and will resume its previous growth soon enough. The problems contributing to slowing growth appear to be related to self-inflicted wounds. Management said as much during the earnings call. "We understand the problems and we are well advanced in addressing them," CEO John Riccitiello said.
Source Fool.com
