Unity Software Inc. (NYSE: U) saw its stock price plummet 5.11% in Thursday's pre-market trading session, following a downgrade from Arete Research. The firm lowered its rating on Unity from Buy to Neutral, while paradoxically raising its price target from $28 to $36.

The downgrade appears to have spooked investors, despite the increase in the price target. Arete's decision to move to a more cautious stance on Unity may reflect concerns about the company's near-term growth prospects or valuation. This change in analyst sentiment likely contributed to the significant sell-off in Unity's shares.

In other news, Unity announced that it will release its third quarter 2025 financial results on November 5, 2025, before the market opens. The company will host a webcast to discuss the results at 8:30 a.m. ET/5:30 a.m. PT on the same day. While this announcement is routine, investors will be closely watching these upcoming results for any signs that might justify or contradict Arete's downgrade.