Why Unity Software Stock Dropped More Than 27%
Shares of Unity Software (NYSE: U) dropped 27.6% in December, according to data provided by S&P Global Market Intelligence. The S&P 500 was down nearly 6%, so these market conditions certainly helped nudge Unity stock downwards. However, an analyst highlighted some challenges facing Unity's industry, which caused the stock to have a more pronounced drop early in the month.
On Dec. 8, BTIG analyst Clark Lampen downgraded Unity stock to a neutral rating from a buy rating, according to The Fly. The rating change rattled investor confidence as did his commentary. Lampen believes that Unity's growth will be challenged for potentially the next two years.
Lampen's concerns for Unity's markets are well founded. For starters, Unity's 3D image-creation software is often used by mobile-gaming companies. Third-party gaming-research company Newzoo recently noted that mobile gaming is expected to have contracted by 4% in 2022 in a surprise correction.
Source Fool.com
