Research Alert: CFRA Maintains Buy Rating On Unity Software Inc.
CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:We raised our target price to $41 from $28, based on 7x (previously 4x) EV/2027E sales, reflecting Unity's accelerating transformation into a scaled AI-driven ad-tech platform with improving unit economics. We increased our 2026 and 2027 revenue estimates to $2.1B and $2.4B, up from $2.0B and $2.3B, as well as our adjusted EPS estimates to $1.05 and $1.30, up from $0.95 and $1.28, to reflect the favorable business mix shift as the company sunsets lower-margin ironSource revenue and divests Supersonic. In our view, Unity is executing well on its portfolio restructuring, and we see an improving revenue and margin outlook as Vector AI scales rapidly and Unity 6 achieves record adoption rates. Q2 guidance reinforces this momentum, with Strategic revenue expected at $455M-$465M (+29-32% Y/Y) and Strategic Grow revenue of $302M-$306M (+50-52% Y/Y), trends we believe are sustainable through 2027 as ironSource headwinds dissipate and Vector AI becomes the dominant growth driver.