UNITY SOFTWARE INC (U) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:U - US91332U1016 - Common Stock
42.34 USD
+0.21 (+0.5%)
42.3 USD
-0.04 (-0.09%)
Taking everything into account, U scores 3 out of 10 in our fundamental rating. U was compared to 278 industry peers in the Software industry. While U seems to be doing ok healthwise, there are quite some concerns on its profitability. While showing a medium growth rate, U is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
- U had negative earnings in the past year.
- U had a positive operating cash flow in the past year.
- U had negative earnings in each of the past 5 years.
- In multiple years U reported negative operating cash flow during the last 5 years.
1.2 Ratios
- U's Return On Assets of -6.42% is in line compared to the rest of the industry. U outperforms 40.65% of its industry peers.
- The Return On Equity of U (-13.60%) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -6.42% | ||
| ROE | -13.6% | ||
| ROIC | N/A |
ROA(3y)-10.99%
ROA(5y)-10.91%
ROE(3y)-24.25%
ROE(5y)-21.77%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
- U has a better Gross Margin (74.32%) than 62.95% of its industry peers.
- In the last couple of years the Gross Margin of U has remained more or less at the same level.
- U does not have Profit Margin and Operating Margin available, so we won't be analyzing them here.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | N/A | ||
| PM (TTM) | N/A | ||
| GM | 74.32% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-1.25%
GM growth 5Y-0.99%
2. Health
2.1 Basic Checks
- U does not have a ROIC to compare to the WACC, probably because it is not profitable.
- The number of shares outstanding for U has been increased compared to 1 year ago.
- Compared to 5 years ago, U has more shares outstanding
- The debt/assets ratio for U has been reduced compared to a year ago.
2.2 Solvency
- An Altman-Z score of 2.55 indicates that U is not a great score, but indicates only limited risk for bankruptcy at the moment.
- Looking at the Altman-Z score, with a value of 2.55, U is in line with its industry, outperforming 57.19% of the companies in the same industry.
- The Debt to FCF ratio of U is 5.71, which is a neutral value as it means it would take U, 5.71 years of fcf income to pay off all of its debts.
- U has a Debt to FCF ratio (5.71) which is comparable to the rest of the industry.
- A Debt/Equity ratio of 0.70 indicates that U is somewhat dependend on debt financing.
- With a Debt to Equity ratio value of 0.70, U is not doing good in the industry: 70.50% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.7 | ||
| Debt/FCF | 5.71 | ||
| Altman-Z | 2.55 |
ROIC/WACCN/A
WACC10.49%
2.3 Liquidity
- U has a Current Ratio of 2.78. This indicates that U is financially healthy and has no problem in meeting its short term obligations.
- Looking at the Current ratio, with a value of 2.78, U is in the better half of the industry, outperforming 74.10% of the companies in the same industry.
- A Quick Ratio of 2.78 indicates that U has no problem at all paying its short term obligations.
- Looking at the Quick ratio, with a value of 2.78, U is in the better half of the industry, outperforming 74.10% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.78 | ||
| Quick Ratio | 2.78 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an impressive 48.48% over the past year.
- U shows a decrease in Revenue. In the last year, the revenue decreased by -8.23%.
- Measured over the past years, U shows a very strong growth in Revenue. The Revenue has been growing by 27.33% on average per year.
EPS 1Y (TTM)48.48%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%3.23%
Revenue 1Y (TTM)-8.23%
Revenue growth 3Y17.76%
Revenue growth 5Y27.33%
Sales Q2Q%5.4%
3.2 Future
- Based on estimates for the next years, U will show a very strong growth in Earnings Per Share. The EPS will grow by 32.49% on average per year.
- The Revenue is expected to grow by 14.30% on average over the next years. This is quite good.
EPS Next Y42.71%
EPS Next 2Y26.41%
EPS Next 3Y21.52%
EPS Next 5Y32.49%
Revenue Next Year2.85%
Revenue Next 2Y8.33%
Revenue Next 3Y10.16%
Revenue Next 5Y14.3%
3.3 Evolution
- The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings Ratio is negative for U. In the last year negative earnings were reported.
- Besides the negative Price/Earnings Ratio, also the Forward Price/Earnings Ratio is negative for U. No positive earnings are expected for the next year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | N/A |
4.2 Price Multiples
- The rest of the industry has a similar Price/Free Cash Flow ratio as U.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 46.34 | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
- U's earnings are expected to grow with 21.52% in the coming years. This may justify a more expensive valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y26.41%
EPS Next 3Y21.52%
5. Dividend
5.1 Amount
- No dividends for U!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
UNITY SOFTWARE INC / U FAQ
What is the fundamental rating for U stock?
ChartMill assigns a fundamental rating of 3 / 10 to U.
What is the valuation status for U stock?
ChartMill assigns a valuation rating of 1 / 10 to UNITY SOFTWARE INC (U). This can be considered as Overvalued.
How profitable is UNITY SOFTWARE INC (U) stock?
UNITY SOFTWARE INC (U) has a profitability rating of 2 / 10.
What is the expected EPS growth for UNITY SOFTWARE INC (U) stock?
The Earnings per Share (EPS) of UNITY SOFTWARE INC (U) is expected to grow by 42.71% in the next year.