were falling in premarket Thursday after an analyst at Benchmark initiated coverage on the stock at Sell, saying that market conditions will shift investor interest elsewhere.
Mike Hickey initiated coverage of Unity (ticker: U) at Sell with a $27 price target. In a research note, Hickey said he suspects that “sustained economic malaise, post-pandemic normalization on player engagement and user acquisition, and rationalized spend scenarios could be a challenging environment for Unity’s growth profile.”
The need to stay at home during lockdown mandates at the height of the Covid-19 pandemic increased player engagement and awareness of the metaverse opportunity, Hickey added. Now that pandemic restrictions have loosened, Hickey believes that “normalized player behavior in a post-pandemic scenario should dampen elevated trends including engagement, monetization, and user acquisition spend.”
Shares of Unity fell 5.5% early Thursday to $34.19. The stock has had a challenging year. Coming into Thursday, it has dropped 75% in 2022.
Hickey also added that the “metaverse hype punctuated the peak of a momentum market that has now expired,” and he thinks investors won’t remain as interested as they once were.
“Unity was a pandemic darling that has now entered a less optimal operating scenario,” Hickey said.
Unity Stock Initiated at Sell. It Once Was a ‘Pandemic Darling.’
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Hickey initiated coverage of Unity at a Sell rating with a $27 price target.
David Paul Morris/Bloomberg
Shares of
Unity Software
were falling in premarket Thursday after an analyst at Benchmark initiated coverage on the stock at Sell, saying that market conditions will shift investor interest elsewhere.
Mike Hickey initiated coverage of Unity (ticker: U) at Sell with a $27 price target. In a research note, Hickey said he suspects that “sustained economic malaise, post-pandemic normalization on player engagement and user acquisition, and rationalized spend scenarios could be a challenging environment for Unity’s growth profile.”
The need to stay at home during lockdown mandates at the height of the Covid-19 pandemic increased player engagement and awareness of the metaverse opportunity, Hickey added. Now that pandemic restrictions have loosened, Hickey believes that “normalized player behavior in a post-pandemic scenario should dampen elevated trends including engagement, monetization, and user acquisition spend.”
Shares of Unity fell 5.5% early Thursday to $34.19. The stock has had a challenging year. Coming into Thursday, it has dropped 75% in 2022.
Hickey also added that the “metaverse hype punctuated the peak of a momentum market that has now expired,” and he thinks investors won’t remain as interested as they once were.
“Unity was a pandemic darling that has now entered a less optimal operating scenario,” Hickey said.
Write to Angela Palumbo at [email protected]
Source: https://www.barrons.com/articles/unity-software-sell-rating-51655380734?siteid=yhoof2&yptr=yahoo