Updated: Apr 13, 2021
Unity Software (NYSE: U), Mkt cap 34b, growth stock but still loss making thus no PE nor div yield.
In the U.S., time spent gaming has increased 45% since the beginning of the COVID-19 pandemic. Unity is fast becoming a household name among gamers. Unity and Epic Games' Unreal Engine enjoyed a near duopoly on the industry. Unity estimates it is the platform behind 53% of the top 1,000 mobile games. Popular games developed using Unity’s engine includes Animal Crossing, Ring Fit Adventure, Mario Kart Tour, Call of Duty, League of Legends: Wild Rift, etc. Unity estimates that its addressable market within the industry is $12 billion. With its recent trailing revenue of $710 million, it has a long run way of growth in front of it.
On a short-term basis, we can see a possible support on its daily chart as Unity hovered around the lower boundary of a downward trending channel. With its Stochastic trading at oversold level, if price fails to break below the channel support, it may bounce back up to the upper boundary of the channel, which is around the $150-160 region.
With its duopoly status in the industry, high switching cost, superb technology and large addressable market, Unity should be able to continue growing its revenue in the next 5 years. If you are interested to read up more, attached below is a report from Bloomberg. On a side note, Unity is apparently also Cathie Wood's favorite stock for the week - her ARK ETF funds bought more than 419,000 shares on 8 Feb 2021, worth more than $50 million and representing a third of a percent of the ETF's total assets (source Motley Fool). For your headsup!
This is an opinion piece. Please always do your own due diligence on the company's fundamentals & assess if the Fundamental / Technical analysis opinions are applicable to your trading/investing needs.
Proudly brought to you by StockWhisperer SG