Is it Smart to Invest in Unity Software Stock Right Now?

Investors interested in IPO shares out there – if you’re considering Unity software stock, then let’s gain some insights here. Unity Technologies is the world’s leading game engine and still growing. In 2019, out of the top 100 game development studios, 93 were Unity customers. Today, it owns more than 45% of the game engine market.

So, how did Unity Technologies Inc really get here? Let’s do a little background check before we consider buying the stock.

When Did the Unity Software Stock Start Growing?

The game development platform was first found in 2004. One of the reasons why it works so well is because their engine can be used by anyone – from beginners to studios. Most game creators use this platform as it is friendly with all kinds of devices. These include PlayStation, Xbox, iOS, Android and Microsoft.

Some of the games that have been built on this platform include Rick and Morty, Monument Valley, Pokémon Go, Super Mario Run, Life of Us, Lara Croft GO, Virtual Rick-ality and D.R.O.N.E. Since the year 2018, it has started expanding in other fields such as automation, film making, online shopping, healthcare, research and product development.

In the year 2019, their revenue grew by 52%. In the first 9 months of 2020, it grew to $552 million by 44%.

Last year in September, they sold off 25 million shares in the IPO at a price of $52 per share. On the very first day of trading, this price shot up to $75 per share. This helped the company raise $1.3 billion.

Currently, the valuation of this share is $150. In a period of 5 months only, the valuation of the stock has gone up by 188%. The addressable market for its software is $29 billion.

What to Do?

Analysts expect the revenue to rise by 26% this year to $957 million. Thus, the Unity software stock is more likely to rise and go over 50 times this year’s sales. This is likely to be more than 40 times 2022’s sales too. In other words, the stock is already quite pricey and will become a lot more expensive if you choose to purchase them later this year. On the other hand, it is risky to say if you’re likely to make a profit out of it.

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