![]() As a result, its net expansion rate has maintained around 140% over time. Moreover, its customers continue to expand their use cases consistently. Its enterprise customer grew from just 553 in FQ3'19 to 973 in FQ3'21, representing a CAGR of 32.7%. Data source: Company filingsĬonsequently, Unity continues to experience stellar growth in its enterprise base. In addition, the company has documented numerous industrial and commercial use cases as enterprise customers realize the power of its real-time 3D engine. Creators have already used the company's solutions across multiple industries, most notably in gaming. Therefore, we firmly believe that it's a transformative acquisition for Unity. If you go to SIGGRAPH and look through papers… it just goes Weta, Weta, Weta." They've been focused on graphics research for 20 years. Unity emphasized (edited): " These 275 people, they're extraordinary. The deal also brought 275 world-class engineers into Unity's payroll, which the company believes is some of the best talents that Weta Digital has recruited. The company has also completed its acquisition of Weta Digital on 1 December, as it works on integrating Weta Digital's unique technology stack into its offerings. ![]() Unity's robust FQ3 report card demonstrated that the company is still barely scratching the surface of its massive TAM, which expanded to $45B recently. However, we always intend to add exposure again when the euphoria has dissipated. We took the opportunity to pare down our exposure in the recent spike and rotated to other undervalued growth stocks. Why We are Turning Bullish On Unity Stock? However, the euphoria was short-lived as Unity stock's valuation returned to haunt investors who joined the "spike bandwagon." After its recent retracement, the stock is back in the red for the year, with a YTD return of -5.2%, significantly underperforming the market. The stock was on a steady climb towards its recovery until the momentum spike catapulted its YTD gain to 28% in November. We also saw the opportunity from its mispricing in May and June and thus encouraged investors to accumulate. Unity stock has had a disappointing year until its upward momentum started to recover in H2'21. U stock YTD performance (as of 23 December' 21). We discuss why we think investors who have been biding their time can consider adding exposure. Moreover, thanks to the steep retracement in growth stocks recently, we believe that the time has come for us to revisit our rating. The stock has fallen 20% since the article was published. However, we updated in a recent November article cautioning investors not to chase the hype and revised our rating to Neutral. ![]() Our bullish calls in May and June are still up 62% and 32%, respectively. Nevertheless, we have been bullish on Unity stock throughout the year. The bull-trap was well-laid by the market makers, and these investors have been given invaluable lessons about patience and valuation. Impatient investors had driven the stock up as it reported robust earnings, coupled with the euphoria surrounding its Weta Digital acquisition. The retracement knocked its price level back to more reasonable levels after dropping 30% from its all-time high. ![]() ( NYSE: U) stock suffered a well-deserved battering recently as sellers took control. Sundry Photography/iStock Editorial via Getty Images Investment Thesis
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |