Video game design and animation software maker Unity Software saw its shares surge on Friday after it beat Wall Street's targets for the fourth quarter and guided higher for the full year ahead. Unity stock rose over 17% on the news.
The San Francisco-based company late Thursday said it lost an adjusted 5 cents a share on sales of $315.9 million in the December quarter. Analysts had expected Unity to lose 7 cents a share on sales of $295.5 million, according to FactSet. In the year-earlier period, it lost 10 cents a share on sales of $220.3 million.
For the current quarter, Unity forecast sales of $317.5 million, up 35% from the same period last year and matching Wall Street targets. That's based on the midpoint of its outlook.
For full year 2022, Unity expects revenue of $1.5 billion vs. analyst estimates for $1.43 billion. That would translate to year-over-year growth of 35%. Last year, Unity sales rose 44% to $1.11 billion.
Unity Stock Jumps On Report
On the stock market today, Unity stock advanced 17.4% to close at 108.66. During the regular session Thursday, Unity stock fell 9.3% to 92.54 amid a brutal day for stocks overall.
Unity expects to break even during 2023, Chief Financial Officer Luis Visoso told Investor's Business Daily.
"We continue to drive profitability, but not at the expense of growth because we believe the opportunities out there are massive," Visoso said. For instance, Unity says it will provide the building blocks for the coming metaverse, an immersive next-generation internet.
U Stock Ranks Ninth In Group
Unity develops software for creating, running and monetizing interactive 2D and 3D content for mobile phones, tablets, PCs, consoles, and augmented and virtual reality devices. Today that's mostly video games, but the company also provides software for movie and television visual effects, and commercial design.
"We believe that the transition from linear 2D to interactive real-time 3D presents a massive growth opportunity for the next decades," Chief Executive John Riccitiello said in a news release. "These are strong tailwinds that help us drive growth for years to come."
Unity stock ranks ninth out of 12 stocks in IBD's Computer Software-Design industry group, according to IBD Stock Checkup. It has a subpar IBD Composite Rating of 22 out of 99. IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
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