Unity Software (U) to Post Q3 Earnings: What’s in the Cards?

Unity Software U is set to release third-quarter 2020 results on Nov 12.

Markedly, this would be the company’s first earnings call. This real-time 2D and 3D content provider began trading on the New York Stock Exchange on Sep 18.

The Zacks Consensus Estimate for revenues is currently pegged at $186.6 million.

Moreover, the consensus mark for a loss of 15 cents per share has remained unchanged over the past seven days.

Unity Software Inc. Price and EPS Surprise

Unity Software Inc. Price and EPS Surprise

Unity Software Inc. price-eps-surprise | Unity Software Inc. Quote

Factors to Consider

Unity Software’s third-quarter results are expected to have benefited from robust demand for its software solutions from content creators like game developers, architects, automotive designers and filmmakers.

Moreover, the online gaming industry has been witnessing accelerated growth owing to the coronavirus-led shelter-in-place guidelines. This is likely to have boosted the presence of Unity’s software solutions, which enable independent developers, freelance artists and global publishers like AAA Studios to create and operate content.

Further, strong demand for interactive, real-time 2D and 3D content for mobile phones, tablets, PCs and virtual reality devices is expected to have aided the company’s top line.

Notably, as of Jun 30, 2020, the company hosted 1.5 million monthly active creators in more than 190 countries and territories around the world.

Additionally, the company’s dollar-based net expansion rate, which measures expansion in existing customers’ revenues over a trailing 12-month period, grew from 129% as of Jun 30, 2019, to 142% as of Jun 30, 2020.

The momentum is likely to have continued in the to-be-reported quarter, driven primarily by strong adoption of the company’s subscription-based Create Solutions and Operate Solutions.

What Our Model Says

According to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Unity Software has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are a few companies, which, per our model, have the right combination of elements to post an earnings beat in their upcoming releases.

Spectrum Brand Holdings SPB has an Earnings ESP of +9.24% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Beacon Roofing Supply BECN has an Earnings ESP of +3.38% and a Zacks Rank #2.

NVIDIA Corporation NVDA has an Earnings ESP of +1.75% and a Zacks Rank #2.

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