- Q1 Rundown: Unity (NYSE:U) Vs Other Design Software Stocks
May 14, 2026
The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Unity (NYSE:U) and the rest of the design software stocks fared in Q1.
The demand for rich, interactive 2D, 3D, VR and AR experiences is growing, and while the ubiquitous metaverse might still be more of a buzzword than a real thing, what is real is the demand for the tools to create these experiences, whether they are games, 3D tours or interactive movies.
The 6 design software stocks we track reported a strong Q1. As a group, revenues beat analysts’ consensus estimates by 3% while next quarter’s revenue guidance was in line.
While some design software stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 4.1% since the latest earnings results.
Unity (NYSE:U)
Powering over half of the world's mobile games and expanding into industries from automotive to architecture, Unity (NYSE:U) provides software tools and services that allow developers to create, run, and monetize interactive 2D and 3D content across multiple platforms.
Unity reported revenues of $508.2 million, up 16.8% year on year. This print exceeded analysts’ expectations by 0.9%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ EBITDA and billings estimates.Unity Total Revenue
Unity delivered the weakest performance against analyst estimates of the whole group. Unsurprisingly, the stock is down 1% since reporting and currently trades at $27.00.
Is now the time to buy Unity? Access our full analysis of the earnings results here, it’s free.
Best Q1: Cadence Design Systems (NASDAQ:CDNS)
Powering the chips behind everything from smartphones to AI accelerators for over 35 years, Cadence Design Systems (NASDAQ:CDNS) provides essential computational software, hardware, and intellectual property used by engineers to design and verify advanced electronic systems and semiconductors.
Cadence Design Systems reported revenues of $1.47 billion, up 18.7% year on year, outperforming analysts’ expectations by 1.9%. The business had a very strong quarter with a solid beat of analysts’ billings and EBITDA estimates.Cadence Design Systems Total Revenue
The market seems happy with the results as the stock is up 7.6% since reporting. It currently trades at $362.05.
Is now the time to buy Cadence Design Systems? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: Dolby Laboratories (NYSE:DLB)
Known for its iconic "D" logo that appears before countless movies and TV shows, Dolby Laboratories (NYSE:DLB) designs and licenses audio and video technologies that enhance entertainment experiences in movies, TV shows, music, and other media.
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Dolby Laboratories reported revenues of $395.6 million, up 7.1% year on year, exceeding analysts’ expectations by 2.8%. Still, it was a slower quarter as it posted revenue and EPS guidance for next quarter missing analysts’ expectations.
Dolby Laboratories delivered the highest full-year guidance raise but had the slowest revenue growth in the group. As expected, the stock is down 9.5% since the results and currently trades at $58.05.
Read our full analysis of Dolby Laboratories’s results here.
PTC (NASDAQ:PTC)
Originally known as Parametric Technology Corporation until its 2013 rebranding, PTC (NASDAQ:PTC) provides software that helps manufacturers design, develop, and service physical products through digital solutions for CAD, PLM, ALM, and SLM.
PTC reported revenues of $774.3 million, up 21.7% year on year. This number topped analysts’ expectations by 8.6%. Taking a step back, it was a satisfactory quarter as it also logged an impressive beat of analysts’ billings estimates but EPS guidance for next quarter missing analysts’ expectations significantly.
PTC scored the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is up 6.8% since reporting and currently trades at $146.01.
Read our full, actionable report on PTC here, it’s free.
Procore Technologies (NYSE:PCOR)
With a mission to build software for the people that build the world, Procore Technologies (NYSE:PCOR) provides cloud-based software that enables owners, contractors, and other stakeholders to collaborate and manage construction projects from any device.
Procore Technologies reported revenues of $359.3 million, up 15.7% year on year. This result surpassed analysts’ expectations by 1.9%. Aside from that, it was a satisfactory quarter as it also produced a solid beat of analysts’ EBITDA estimates but revenue guidance for next quarter meeting analysts’ expectations.
The stock is down 19.5% since reporting and currently trades at $50.00.
Read our full, actionable report on Procore Technologies here, it’s free.
Market Update
Late in 2025 into early 2026, there was hand wringing around artificial intelligence. For software companies, the fear was that AI would erode pricing power and compress margins as new tools made it easier to replicate what once required expensive enterprise platforms. Crypto investors had their own version of the same anxiety: if AI agents could trade, allocate capital, and manage wallets autonomously, what exactly was the long-term value of today’s crypto infrastructure?
These concerns triggered a noticeable rotation away from these sectors and into safer havens. But markets rarely dwell on one narrative for long. Spring 2026 came, and the focus shifted abruptly from technological disruption to geopolitical risk. The US’ conflict with Iran became the dominant driver of market psychology, and when geopolitics takes center stage, the script changes quickly. Investors stop debating growth rates and start worrying about oil supply, inflation, and global stability.
Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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- Roblox's Agentic AI Push Gains Scale: Can It Reshape Creation?
May 12, 2026
Roblox Corporation RBLX is expanding its artificial intelligence capabilities as it looks to accelerate creator productivity and improve the quality of experiences across its platform. Management said nearly half of Roblox’s top 1,000 creators now use either Roblox Assistant or model context protocol tools to compress development timelines. Creators are also using third-party tools such as Claude Code, Cursor and Codex within Roblox Studio, highlighting broader AI adoption across the company’s creator ecosystem.
The initiative comes as Roblox works to deepen platform engagement and broaden content diversity. In the first quarter of 2026, bookings increased 43% year over year to $1.7 billion, daily active users rose 35% to 132 million and hours engaged grew 43% to 31 billion. Management also noted that games outside the top 10 generated 65% of spending growth, signaling healthier content concentration across the platform. Against this backdrop, AI tools that shorten development cycles and help smaller teams produce higher-quality content remain an important lever for Roblox’s creator-driven model.
Roblox described April as the month “Roblox Studio went Agentic,” with Assistant now able to support design, implementation and test planning, execute plans and launch building agents to help deliver features with limited creator involvement. The company is also expanding AI across mesh and procedural model generation, NPC testing agents, discovery recommendations, communication safety and 3D generation. Management said Roblox runs more than 400 models and more than 1.5 million inferences per second across its on-premise and cloud infrastructure.
The longer-term ambition is broader than coding assistance. Roblox is investing in four in-house proprietary models covering 4D generation, NPC behavior, video super upsampling and coding assistance and generation. Management also highlighted Roblox Reality, a patent-pending architecture designed to combine hyperscale multiplayer simulation, photorealistic rendering and persistent world state. While still an emerging project, Roblox Reality underscores the company’s effort to build AI deeper into the creation and rendering stack rather than treating it solely as a productivity layer.
Peer Comparison
Unity Software Inc. U is also using AI to expand interactive content creation. The company said 90% of game developers are already using AI in their workflows, while newly published Made with Unity games rose 12% sequentially and new Unity sign-ups increased 20% quarter over quarter in the first quarter. Unity Software’s AI push is centered on Vector and Unity AI, an integrated agent built for Unity workflows that can use project context across scenes, assets and code to accelerate development.
Take-Two Interactive Software, Inc. TTWO is taking a more studio-led approach. Take-Two said it is actively embracing generative AI through hundreds of pilots and implementations, including across its studios. Management views AI as a tool to drive efficiencies, reduce costs and free creators to focus on higher-value creative work, while emphasizing that AI does not replace core elements of game development such as storyline, emotional connection and mission structure.
Against this backdrop, Roblox’s AI strategy is more platform-native and creator-network driven. While Unity Software is using AI to enhance development tools and advertising personalization, and Take-Two is applying AI within a premium franchise production model, Roblox is embedding agentic AI directly into a creator economy where creation, distribution, engagement and monetization operate within the same ecosystem.
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RBLX’s Stock Price Performance, Valuation & Estimates
Roblox shares have declined 34.6% over the past three months compared with the industry’s fall of 4.5%.
RBLX Three-Month Price PerformanceZacks Investment Research
Image Source: Zacks Investment Research
From a valuation standpoint, RBLX trades at a forward 12-month price-to-sales (P/S) multiple of 3.47, well above the industry average of 2.06.
RBLX’s P/S Ratio (Forward 12-Month) vs. IndustryZacks Investment Research
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for RBLX’s 2026 earnings implies a year-over-year increase of 5.8%. Estimates for 2026 loss per share have narrowed in the past 30 days.
EPS Trend of RBLX StockZacks Investment Research
Image Source: Zacks Investment Research
Roblox has a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Take-Two Interactive Software, Inc. (TTWO) : Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).
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- U Q1 Deep Dive: AI-Driven Product Launches and Margin Expansion Dominate Unity’s Narrative
May 12, 2026
Interactive software platform Unity (NYSE:U) reported Q1 CY2026 results topping the market’s revenue expectations , with sales up 16.8% year on year to $508.2 million. The company expects next quarter’s revenue to be around $510 million, close to analysts’ estimates. Its non-GAAP profit of $0.23 per share was 4.2% below analysts’ consensus estimates.
Is now the time to buy U? Find out in our full research report (it’s free).
Unity (U) Q1 CY2026 Highlights:
Revenue: $508.2 million vs analyst estimates of $503.8 million (16.8% year-on-year growth, 0.9% beat) Adjusted EPS: $0.23 vs analyst expectations of $0.24 (4.2% miss) Adjusted Operating Income: $138.3 million vs analyst estimates of $111.7 million (27.2% margin, 23.8% beat) Revenue Guidance for Q2 CY2026 is $510 million at the midpoint, roughly in line with what analysts were expecting EBITDA guidance for Q2 CY2026 is $132.5 million at the midpoint, above analyst estimates of $131 million Operating Margin: -69.1%, down from -29.4% in the same quarter last year Billings: $516.1 million at quarter end, up 18.6% year on year Market Capitalization: $11.66 billion
StockStory’s Take
Unity’s Q1 results were characterized by strong year-over-year revenue growth and robust performance in its core advertising and game creation platforms. Management pointed to notable adoption of AI-powered tools, particularly the new Vector engine, as a major factor behind the company’s momentum. CEO Matthew Bromberg highlighted that “newly released mobile apps are up 60% year-over-year,” attributing this to both broader industry trends and Unity’s ability to deliver products that meet evolving developer needs. Improvements in the stability and performance of Unity’s core software, along with ongoing price adjustments, contributed to strength across both the Create and Grow segments, with the latter seeing especially rapid expansion driven by AI personalization.
Looking ahead, Unity’s forward guidance is shaped by confidence in its expanding AI capabilities, the rollout of new product offerings like Unity AI and a transition toward usage-based pricing models. Bromberg stated, “We now expect our business to become GAAP profitable by the fourth quarter of 2026, an important financial milestone.” Management emphasized that the company’s financial outlook depends on scaling its AI-driven solutions, integrating real-time runtime data into key products, and maintaining high opt-in rates to its developer data framework. The upcoming launch of the Unity commerce platform and further enhancements to Vector are also cited as central to sustaining Unity’s growth trajectory.
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Key Insights from Management’s Remarks
Management attributed Unity’s quarterly performance to rapid adoption of AI-powered tools, ongoing product improvements, and operational discipline, while also highlighting the strategic shift toward usage-based pricing models and the importance of new product launches.
AI acceleration across products: Unity’s Vector engine drove strong sequential revenue growth and is now central to both Create and Grow product lines, reflecting the increasing importance of AI in content creation and advertising optimization. Management reported that “Vector revenue in the first quarter of 2026 is 80% larger than 1 year ago.” New product launches: The public beta of Unity AI, an integrated agent that understands project context and Unity-specific workflows, was rolled out with positive early adoption. This tool enables creators to accelerate game development by ingesting images and transforming them directly into production-ready assets, improving efficiency for both professionals and non-traditional creators. Expanded customer adoption: CEO Bromberg reported a 20% quarter-over-quarter increase in new Unity sign-ups, the fastest since 2020, and a 12% sequential rise in newly published Made with Unity games, suggesting that AI-driven productivity tools are attracting a broader range of users, including nonprofessional creators. Operational leverage and margin expansion: CFO Jarrod Yahes highlighted that adjusted EBITDA margin reached 27%, aided by cost discipline in sales, marketing, and general administration, while R&D investment—particularly in AI—rose 17% year-over-year. Management expects further margin expansion as the company sunsets certain legacy businesses and streamlines operations. Business model evolution: The company is transitioning its pricing to reflect consumption and agent usage, not just seat licenses, aligning revenue with customer value creation as AI tools become more integrated into workflows. Management believes this will support scalable, long-term growth and better reflect how customers use Unity’s offerings.
Drivers of Future Performance
Unity’s forward outlook is driven by scaling AI-powered product adoption, evolving business models, and operational improvements, with management focused on achieving GAAP profitability through continued innovation and cost discipline.
AI-native product pipeline: Management expects continued momentum from new AI-driven launches, such as Unity AI and enhancements to Vector, to support both revenue growth and deeper customer engagement. The company believes that integrating real-time behavioral data will offer a competitive edge and drive incremental performance in advertising and content creation. Shift to usage-based pricing: Unity’s move toward consumption-based and agent-driven pricing is expected to align revenue with customer productivity gains, particularly as AI becomes integral to customer workflows. This transition aims to capture more value from both professional and prosumer creators, though management cautioned that adoption rates and customer acceptance will influence the pace of revenue realization. Margin expansion levers: Management anticipates operating leverage from cost reductions in legacy segments, automation, and divestitures such as the Supersonic business. They project that these actions, combined with disciplined R&D investment, will improve profitability and help the company achieve its target of GAAP net income by the end of 2026.
Catalysts in Upcoming Quarters
Looking ahead, our analysts will be watching (1) the pace of adoption and monetization for new AI-native products like Unity AI and Vector enhancements, (2) progress on integrating real-time runtime data to boost advertising effectiveness and game creation, and (3) Unity’s ability to execute its shift to consumption-based pricing models. Additional drivers include the launch of Unity’s commerce platform and further updates on operational streamlining and divestitures.
Unity currently trades at $26.50, down from $27.27 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free for active Edge members).
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- Lazard And 2 Stocks That May Be Trading Below Their Estimated Value
May 11, 2026
Over the last 7 days, the United States market has risen by 2.2%, contributing to a significant 31% increase over the past year, with earnings forecasted to grow by 17% annually. In such a robust environment, identifying stocks that may be trading below their estimated value can offer investors potential opportunities for growth and diversification.
Top 10 Undervalued Stocks Based On Cash Flows In The United States
Name Current Price Fair Value (Est) Discount (Est) Upstart Holdings (UPST) $28.96 $57.41 49.6% Unity Software (U) $28.16 $56.00 49.7% Travere Therapeutics (TVTX) $42.60 $84.04 49.3% Solstice Advanced Materials (SOLS) $78.25 $153.27 48.9% Q2 Holdings (QTWO) $50.13 $98.74 49.2% PACS Group (PACS) $33.59 $66.22 49.3% Janus Living (JAN) $27.92 $54.11 48.4% iRhythm Holdings (IRTC) $120.66 $233.64 48.4% Cactus (WHD) $54.14 $104.50 48.2% AXT (AXTI) $116.36 $229.80 49.4%
Click here to see the full list of 142 stocks from our Undervalued US Stocks Based On Cash Flows screener.
Let's review some notable picks from our screened stocks.
Lazard
Overview: Lazard, Inc. is a financial advisory and asset management firm with operations across the Americas, Europe, the Middle East, Africa, and the Asia Pacific, and it has a market cap of approximately $4.73 billion.
Operations: The company's revenue is primarily derived from its Financial Advisory segment at $1.83 billion and Asset Management segment at $1.40 billion.
Estimated Discount To Fair Value: 46.4%
Lazard is trading at US$48.08, significantly below its estimated future cash flow value of US$89.71, indicating it may be undervalued based on cash flows. Despite a high debt level and an unstable dividend track record, Lazard's earnings are projected to grow 31.3% annually over the next three years, surpassing both its peers and the broader US market growth rates. Recent Q1 earnings showed net income rising to US$100.92 million from last year's US$60.38 million.
In light of our recent growth report, it seems possible that Lazard's financial performance will exceed current levels. Dive into the specifics of Lazard here with our thorough financial health report.LAZ Discounted Cash Flow as at May 2026
On Holding
Overview: On Holding AG, with a market cap of $11.66 billion, develops and distributes performance sports products under the On brand across various regions including Europe, the Middle East, Africa, the Americas, and Asia-Pacific.
Operations: The company's revenue segment includes Athletic Footwear, generating CHF 3.01 billion.
Estimated Discount To Fair Value: 20.8%
On Holding, trading at $35.24, is valued below its estimated future cash flow value of $44.51, suggesting potential undervaluation based on cash flows. Despite a decline in net profit margin from 10.5% to 6.8%, the company anticipates robust earnings growth of 24.4% annually over the next three years, outpacing the US market's average growth rate. Recent organizational changes aim to enhance strategic execution as On Holding scales globally with projected revenue growth exceeding market averages.
Story Continues
Our expertly prepared growth report on On Holding implies its future financial outlook may be stronger than recent results. Get an in-depth perspective on On Holding's balance sheet by reading our health report here.ONON Discounted Cash Flow as at May 2026
York Space Systems
Overview: York Space Systems, Inc. is a space and defense company offering mission-critical solutions to national security, government, and commercial clients in the U.S., with a market cap of $4.44 billion.
Operations: The company's revenue is primarily derived from its Aerospace & Defense segment, totaling $386.20 million.
Estimated Discount To Fair Value: 11.2%
York Space Systems, trading at US$34.79, is valued below its estimated future cash flow value of US$39.18, indicating potential undervaluation based on cash flows. The company forecasts robust revenue growth of 26.7% annually, surpassing the US market average. Recent IDIQ contract awards in national security and defense enhance York's strategic position and operational scale, while board expansion with experienced leadership supports governance as it aims for profitability within three years amidst volatile share prices.
Insights from our recent growth report point to a promising forecast for York Space Systems' business outlook. Unlock comprehensive insights into our analysis of York Space Systems stock in this financial health report.YSS Discounted Cash Flow as at May 2026
Key Takeaways
Take a closer look at our Undervalued US Stocks Based On Cash Flows list of 142 companies by clicking here. Invested in any of these stocks? Simplify your portfolio management with Simply Wall St and stay ahead with our alerts for any critical updates on your stocks. Unlock the power of informed investing with Simply Wall St, your free guide to navigating stock markets worldwide.
Searching for a Fresh Perspective?
Explore high-performing small cap companies that haven't yet garnered significant analyst attention. Diversify your portfolio with solid dividend payers offering reliable income streams to weather potential market turbulence. Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include LAZONON and YSS.
This article was originally published by Simply Wall St.
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- 3 Prominent Stocks Estimated To Be Up To 49.4% Below Intrinsic Value
May 11, 2026
Over the last 7 days, the United States market has risen by 2.2%, and over the past 12 months, it has seen a significant increase of 31%, with earnings expected to grow by 17% per annum in the coming years. In this context of robust market performance, identifying stocks that are potentially undervalued can offer investors opportunities to invest in companies whose intrinsic values may not yet be fully recognized by the market.
Top 10 Undervalued Stocks Based On Cash Flows In The United States
Name Current Price Fair Value (Est) Discount (Est) Upstart Holdings (UPST) $28.96 $57.41 49.6% Unity Software (U) $28.16 $56.00 49.7% Travere Therapeutics (TVTX) $42.60 $84.04 49.3% Solstice Advanced Materials (SOLS) $78.25 $153.27 48.9% Q2 Holdings (QTWO) $50.13 $98.74 49.2% PACS Group (PACS) $33.59 $66.22 49.3% Janus Living (JAN) $27.92 $54.11 48.4% iRhythm Holdings (IRTC) $120.66 $233.64 48.4% Cactus (WHD) $54.14 $104.50 48.2% AXT (AXTI) $116.36 $229.80 49.4%
Click here to see the full list of 142 stocks from our Undervalued US Stocks Based On Cash Flows screener.
Let's dive into some prime choices out of the screener.
Intuitive Machines
Overview: Intuitive Machines, Inc. is a space infrastructure and services company based in the United States with a market cap of $6.30 billion.
Operations: The company generates revenue primarily from its Aerospace & Defense segment, which accounts for $210.06 million.
Estimated Discount To Fair Value: 29.9%
Intuitive Machines is trading at $28.97, below its estimated future cash flow value of $41.33, indicating it may be undervalued based on discounted cash flows. Despite a volatile share price and recent shareholder dilution, the company projects robust revenue growth of 27.5% annually, outpacing the US market average. Recent contracts with NASA underscore its strategic positioning in space exploration, while expected profitability within three years suggests potential for significant financial improvement.
Upon reviewing our latest growth report, Intuitive Machines' projected financial performance appears quite optimistic. Dive into the specifics of Intuitive Machines here with our thorough financial health report.LUNR Discounted Cash Flow as at May 2026
AST SpaceMobile
Overview: AST SpaceMobile, Inc., along with its subsidiaries, designs and develops the BlueBird satellite constellation in the United States, with a market cap of $29.12 billion.
Operations: The company's revenue is primarily generated from its Wireless Communications Equipment segment, which accounts for $70.92 million.
Estimated Discount To Fair Value: 42.2%
AST SpaceMobile, trading at $75.05, is considerably undervalued with an estimated future cash flow value of $129.89. Despite recent shareholder dilution and a volatile share price, the company forecasts robust annual earnings growth of 109.35% and revenue expansion at 46.6%, surpassing US market averages. The FCC's approval for satellite deployment enhances its strategic position in space-based cellular broadband, while partnerships with major telecom operators bolster its growth trajectory and technological validation.
Story Continues
The growth report we've compiled suggests that AST SpaceMobile's future prospects could be on the up. Navigate through the intricacies of AST SpaceMobile with our comprehensive financial health report here.ASTS Discounted Cash Flow as at May 2026
AXT
Overview: AXT, Inc. designs, develops, manufactures, and distributes compound and single element semiconductor substrates with a market cap of $7.41 billion.
Operations: The company's revenue is primarily derived from the design, development, manufacturing, and distribution of compound and single element semiconductor substrates.
Estimated Discount To Fair Value: 49.4%
AXT, Inc. is significantly undervalued, trading at $116.36 against a future cash flow estimate of $229.8, despite recent shareholder dilution and share price volatility. The company reported Q1 2026 sales of US$26.92 million, improving from US$19.36 million a year ago, with a reduced net loss of US$1.62 million compared to US$8.8 million previously. Forecasted revenue growth of 44.3% annually outpaces the broader market's 11.6%, highlighting its strong potential for profitability within three years.
The analysis detailed in our AXT growth report hints at robust future financial performance. Get an in-depth perspective on AXT's balance sheet by reading our health report here.AXTI Discounted Cash Flow as at May 2026
Next Steps
Click here to access our complete index of 142 Undervalued US Stocks Based On Cash Flows. Have a stake in these businesses? Integrate your holdings into Simply Wall St's portfolio for notifications and detailed stock reports. Take control of your financial future using Simply Wall St, offering free, in-depth knowledge of international markets to every investor.
Searching for a Fresh Perspective?
Explore high-performing small cap companies that haven't yet garnered significant analyst attention. Diversify your portfolio with solid dividend payers offering reliable income streams to weather potential market turbulence. Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include LUNRASTS and AXTI.
This article was originally published by Simply Wall St.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
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- Unity Nexxen Ad Deal Tests Unity Software Valuation And Momentum
May 10, 2026
Find your next quality investment with Simply Wall St's easy and powerful screener, trusted by over 7 million individual investors worldwide.
Unity Software (NYSE:U) has partnered with Nexxen to bring Unity’s large in-app gaming ad supply into Nexxen’s demand-side platform. The collaboration focuses on AI-resilient, non cookie dependent video ads across high attention mobile gaming environments. The move connects advertisers with over 256M monthly active users across a substantial share of the top 1,000 mobile games.
Unity Software, trading at $26.73, is positioned at the intersection of game development tools and mobile advertising, with a footprint across more than 71% of the top 1,000 mobile games. The stock shows a mixed return profile, with a 21.4% gain over the past 30 days and a 29.4% gain over the past year, alongside a 39.6% decline year to date and a 67.0% decline over five years. This backdrop provides context for assessing how new partnerships like the Nexxen deal might influence the company’s overall positioning in digital ads.
The Nexxen partnership introduces an additional channel for Unity to monetize its high engagement mobile audience using deterministic, in-app signals that do not rely on cookies. For investors following NYSE:U, a central consideration is how effectively Unity can turn this expanded access to brands and agencies into durable advertising demand as AI driven buying evolves and traditional identifiers play a smaller role.
Stay updated on the most important news stories for Unity Software by adding it to your watchlist or portfolio. Alternatively, explore our Community to discover new perspectives on Unity Software.NYSE:U Earnings & Revenue Growth as at May 2026
2 things going right for Unity Software that this headline doesn't cover.
Quick Assessment
✅ Price vs Analyst Target: At $26.73, Unity trades about 18% below the US$32.72 analyst price target. ✅ Simply Wall St Valuation: The stock is assessed as undervalued, trading 52.4% below estimated fair value. ✅ Recent Momentum: The 30 day return of 21.4% shows strong short term momentum into this news.
Timing decisions to buy, sell, or hold Unity Software depends on each investor's personal situation. For more detail, see Simply Wall St's company report for the latest analysis of Unity Software's fair value.
Key Considerations
📊 The Nexxen partnership connects Unity’s large gaming ad inventory to an additional demand channel, which can be important given its focus on in-app, video-rich formats. 📊 It may be useful to monitor how ad revenue trends, fill rates, and advertiser adoption of non-cookie, in-app targeting change relative to the current price and the analyst target of US$32.72. ⚠️ Shares have been flagged as volatile over the past 3 months, so price reactions around future ad performance updates could be sharp.
Story Continues
Dig Deeper
For a fuller picture, including more detail on risks and potential rewards, check out the complete Unity Software analysis. You can also visit the community page for Unity Software to see how other investors believe this latest news may affect the company's narrative.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include U.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
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- Unity Software's Q1 Earnings Miss Estimates, Revenues Increase Y/Y
May 8, 2026
Unity Software U reported first-quarter 2026 non-GAAP earnings per share (EPS) of 23 cents compared with 24 cents in the year-ago quarter. The figure missed the Zacks Consensus Estimate by 4.17%.
On a GAAP basis, the company posted a net loss per share of 80 cents compared with a loss of 19 cents in the year-ago quarter, weighed down by $279 million of impairment charges related to the sunset of the ironSource Ads Network and the planned divestiture of the Supersonic publishing business.
Net revenues of $508.24 million rose 17% year over year and comfortably exceeded the company's guided range of $480-$490 million. The figure beat the consensus mark by 1.53%.
Total Strategic Revenue, which excludes the ironSource Ads Network and Supersonic, grew 35% year over year to $432 million. The revenue growth was driven by the Unity Ad Network, propelled by Unity Vector, with additional contribution from higher subscription revenues in Create.
Unity Software Inc. Price, Consensus and EPS SurpriseUnity Software Inc. Price, Consensus and EPS Surprise
Unity Software Inc. price-consensus-eps-surprise-chart | Unity Software Inc. Quote
Q1 Details of Unity Software
Unity Software reported Create Solutions revenues of $157 million, up 4% year over year. The increase was driven by higher subscription revenues, partially offset by declines in cloud and hosting services revenues tied to the company's portfolio reset in 2025. Strategic Create Revenue (which excludes non-strategic items) was $153.7 million, up 15% year over year.
Grow Solutions revenues were $352 million, up 24% year over year. The growth was driven by Unity Vector within the Unity Ad Network, partially offset by declines in the IronSource Ad Network. Strategic Grow Revenue was $278.7 million, up 49% year over year, almost twice the rate of total Grow growth — reflecting Vector's continuing momentum. Per the March 26, 2026, preliminary release, Unity Vector increased 15% sequentially in the first quarter, marking its fourth consecutive quarter of mid-teens sequential growth.
Non-Strategic Revenue, consisting primarily of the ironSource Ads Network and Supersonic, was $75.8 million, down 34% year over year.
Operating Details of Unity
In the first quarter, non-GAAP gross profit increased 16.7% year over year to $419.1 million. Unity's adjusted gross margin of 82% was flat year over year.
Research & development expenses on an adjusted basis grew 8.7% year over year to $152.1 million. Adjusted R&D, as a percentage of revenues, contracted 200 basis points to 30%.
Sales and marketing expenses on an adjusted basis declined 2.3% year over year to $90.9 million. Adjusted S&M, as a percentage of revenues, contracted 300 basis points to 18%.
General & administrative expenses on an adjusted basis decreased 10.3% year over year to $37.9 million. Adjusted G&A, as a percentage of revenues, contracted 300 basis points to 7%.
Unity Software reported adjusted EBITDA of $138 million, up 64.7% year over year and well above the prior guidance of $105-$110 million. The company's adjusted EBITDA margin of 27% improved 800 basis points compared with the prior year, driven by higher revenues and continued cost control.
On a GAAP basis, the net loss for the quarter was $347 million, including the $279 million of impairment charges related to the ironSource Ads Network sunset and the planned Supersonic divestiture, compared with a net loss of $78 million in the year-ago quarter.
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Unity Software's Balance Sheet & Cash Flow
As of March 31, 2026, Unity had cash, cash equivalents and restricted cash of $2.15 billion compared with $2.06 billion as of Dec. 31, 2025. The increase was primarily driven by operations.
Operating cash flow was $71 million in the reported quarter, up from $13 million reported in the year-ago quarter. Free cash flow during the quarter was $66 million compared with $7 million in the prior-year quarter. The current portion of convertible notes was $556.8 million as of March 31, 2026.
Significant Q1 Developments
Alongside its first-quarter results, Unity Software announced the sunset of the ironSource Ads Network, effective April 30, 2026, and disclosed that it had engaged a financial advisor to assist with the divestiture of its Supersonic game publishing business. Management stated that, once completed, these actions are expected to drive faster revenue growth and higher adjusted EBITDA margins. The company also reiterated its expectation to become GAAP profitable by the fourth quarter of 2026.
Unity Software's Guidance for Q2 2026
For the second quarter of 2026, Unity Software anticipates total revenues between $505 million and $515 million. Strategic Revenue is expected in the range of $455-$465 million, implying a rise of 29-32% year over year. Within that, Strategic Grow Revenue is expected between $302 million and $306 million, suggesting an increase of 50-52% year over year, and Strategic Create Revenue is guided in the range of $154-$158 million, indicating a rise of 11-14% year over year (excluding the impact of a $12 million one-time revenue item in the second quarter of 2025).
Adjusted EBITDA is expected in the range of $130-$135 million, indicating year-over-year growth of 44-49%.
Unity’s Zacks Rank & Stocks to Consider
Unity currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Computer and Technology sector include Analog Devices ADI, Applied Materials AMAT and Audioeye AEYE, each currently carrying a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Analog Devices have gained 53.3% in the year-to-date period. Analog Devices is set to report the second quarter of fiscal 2026 results on May 20.
Applied Materials shares have gained 66.8% in the year-to-date period. Applied Materials is scheduled to report its second-quarter 2026 results on May 14.
Audioeye shares have lost 23.3% in the year-to-date period. Audioeye is set to report its first-quarter 2026 results on May 13.
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- Unity Software Inc. (U) Q1 Earnings Lag Estimates
May 7, 2026
Unity Software Inc. (U) came out with quarterly earnings of $0.23 per share, missing the Zacks Consensus Estimate of $0.24 per share. This compares to a loss of $0.19 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of -2.13%. A quarter ago, it was expected that this company would post earnings of $0.2 per share when it actually produced earnings of $0.24, delivering a surprise of +20%.
Over the last four quarters, the company has surpassed consensus EPS estimates two times.
Unity Software, which belongs to the Zacks Internet - Software industry, posted revenues of $508.24 million for the quarter ended March 2026, surpassing the Zacks Consensus Estimate by 1.53%. This compares to year-ago revenues of $435 million. The company has topped consensus revenue estimates four times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Unity Software shares have lost about 38.2% since the beginning of the year versus the S&P 500's gain of 7.6%.
What's Next for Unity Software?
While Unity Software has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Unity Software was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.22 on $506.68 million in revenues for the coming quarter and $0.99 on $2.09 billion in revenues for the current fiscal year.
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Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the top 38% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Another stock from the same industry, Monday.com (MNDY), has yet to report results for the quarter ended March 2026. The results are expected to be released on May 11.
This project management software developer is expected to post quarterly earnings of $0.96 per share in its upcoming report, which represents a year-over-year change of -12.7%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
Monday.com's revenues are expected to be $338.9 million, up 20.1% from the year-ago quarter.
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- Unity (NYSE:U) Surprises With Q1 CY2026 Sales, Stock Soars
May 7, 2026
Interactive software platform Unity (NYSE:U) reported Q1 CY2026 results exceeding the market’s revenue expectations , with sales up 16.8% year on year to $508.2 million. The company expects next quarter’s revenue to be around $510 million, close to analysts’ estimates. Its non-GAAP profit of $0.23 per share was 4.2% below analysts’ consensus estimates.
Is now the time to buy Unity? Find out in our full research report.
Unity (U) Q1 CY2026 Highlights:
Revenue: $508.2 million vs analyst estimates of $503.8 million (16.8% year-on-year growth, 0.9% beat) Adjusted EPS: $0.23 vs analyst expectations of $0.24 (4.2% miss) Adjusted Operating Income: -$274.2 million vs analyst estimates of $111.7 million (-54% margin, significant miss) Revenue Guidance for Q2 CY2026 is $510 million at the midpoint, roughly in line with what analysts were expecting EBITDA guidance for Q2 CY2026 is $132.5 million at the midpoint, above analyst estimates of $131.1 million Operating Margin: -69.1%, down from -29.4% in the same quarter last year Free Cash Flow Margin: 13.1%, down from 23.6% in the previous quarter Billings: $515.6 million at quarter end, up 18.5% year on year Market Capitalization: $11.9 billion
Company Overview
Powering over half of the world's mobile games and expanding into industries from automotive to architecture, Unity (NYSE:U) provides software tools and services that allow developers to create, run, and monetize interactive 2D and 3D content across multiple platforms.
Revenue Growth
A company’s long-term sales performance is one signal of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last five years, Unity grew its sales at a decent 18% compounded annual growth rate. Its growth was slightly above the average software company and shows its offerings resonate with customers.Unity Quarterly Revenue
We at StockStory place the most emphasis on long-term growth, but within software, a half-decade historical view may miss recent innovations or disruptive industry trends. Unity’s recent performance marks a sharp pivot from its five-year trend as its revenue has shown annualized declines of 5.4% over the last two years.Unity Year-On-Year Revenue Growth
This quarter, Unity reported year-on-year revenue growth of 16.8%, and its $508.2 million of revenue exceeded Wall Street’s estimates by 0.9%. Company management is currently guiding for a 15.7% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 12.8% over the next 12 months. While this projection suggests its newer products and services will fuel better top-line performance, it is still below the sector average.
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Billings
Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.
Unity’s billings came in at $515.6 million in Q1, and over the last four quarters, its growth was underwhelming as it averaged 8.7% year-on-year increases. This performance mirrored its total sales and suggests that increasing competition is causing challenges in acquiring/retaining customers.Unity Billings
Customer Acquisition Efficiency
The customer acquisition cost (CAC) payback period measures the months a company needs to recoup the money spent on acquiring a new customer. This metric helps assess how quickly a business can break even on its sales and marketing investments.
It’s relatively expensive for Unity to acquire new customers as its CAC payback period checked in at 115.5 months this quarter. The company’s slow recovery of its sales and marketing expenses indicates it operates in a highly competitive market and must invest to stand out, even if the return on that investment is low.
Key Takeaways from Unity’s Q1 Results
We enjoyed seeing Unity beat analysts’ EBITDA expectations this quarter. We were also glad its billings outperformed Wall Street’s estimates. On the other hand, its revenue guidance for next quarter was in line. Overall, this print had some key positives. The stock traded up 6.4% to $29.01 immediately after reporting.
Unity had an encouraging quarter, but one earnings result doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. We think that the latest quarter is just one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.
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- Unity Software (U) is Leveraging AI for a Competitive Edge in Gaming
May 7, 2026
White Falcon Capital Management, an investment fund manager, released its first-quarter 2025 investor letter. In the tough and volatile first quarter, White Falcon delivered a net return of -6.1%, vs. the S&P 500 TR’s (CAD) -3.1%, MSCI AC TR’s (CAD) -0.6%, and the S&P TSX TR’s 4.0% returns. A copy of the letter is available to download here. In the quarter, the software and services sector faces a downturn due to AI-related risks, but the firm emphasizes long-term performance over short-term results. The White Falcon portfolio aims for positive risk-adjusted returns, diverging from market indexes. The software sector presents a long-term opportunity, leading to increased allocation to essential software companies with competitive advantages. Another significant event this quarter was the conflict in Iran. White Falcon’s investment approach during any conflict is to maintain its portfolio exposure without making drastic changes. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, White Falcon Capital Management highlighted stocks like Unity Software Inc. (NYSE:U). Unity Software Inc. (NYSE:U) is a US-based technology company focusing on developing games and interactive experiences across multiple platforms. On May 6, 2026, Unity Software Inc. (NYSE:U) closed at $27.28 per share. One-month return of Unity Software Inc. (NYSE:U) was 26.47%, and its shares gained 32.11% over the past 52 weeks. Unity Software Inc. (NYSE:U) has a market capitalization of $11.9 billion.
White Falcon Capital Management stated the following regarding Unity Software Inc. (NYSE:U) in its Q1 2026 investor letter:
"Unity Software Inc. (NYSE:U) runs two tightly linked businesses: Create Solutions, its real‑time 3D engine used to build games and interactive experiences where it has a leading share in mobile game creation; and Grow Solutions, its advertising and monetization network that helps game developers acquire users and optimize revenue. This gives Unity a dual revenue model where it earns subscriptions and usage fees from creators and then derives performance based advertising revenue from live games.
Unity sold off aggressively when Google unveiled Project Genie, an AI‑powered tool for generating virtual worlds. We see this as a net positive for Unity. AI accelerates game creation which increases the volume of content that ultimately needs Unity’s engine. The core functions of a real‑time engine - physics, interaction, performance, and playability - that actually make a game playable remain irreplaceable and form the core of Unity’s moat. …” (Click here to read the full text)
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Advanced Micro (AMD) Hits All-Time High as AI Optimism Soars
Unity Software Inc. (NYSE:U) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 80 hedge fund portfolios held Unity Software Inc. (NYSE:U) at the end of the fourth quarter, up from 74 in the previous quarter. While we acknowledge the potential of Unity Software Inc. (NYSE:U) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
In another article, we covered Unity Software Inc. (NYSE:U) and shared the list of stocks that will collapse because of AI. In addition, please check out our hedge fund investor letters Q1 2026 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
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