By Mackenzie Tatananni

Unity Software stock is on the upswing, after falling sharply from its pandemic-era highs. Analysts say it isn't playing games.

Shares of the company, which makes software that helps developers build videogames, have more than doubled in 2025. On Thursday, they rose 1.3% to $49.60, trading near the upper end of their 52-week range. The latest gains followed a flood of positive analyst commentary, as several firms raised their rating on the stock.

Unity made its public trading debut in 2020. Shares notched a closing high of $201.12 and an all-time intraday record of $210, both on Nov. 18, 2021. But by the following year, Unity tumbled below $100 a share.

The former pandemic darling was forced to contend with the fallout from operational missteps as well as broader macroeconomic pressure that extended to all technology stocks with lofty valuations.

Its challenges only compounded in the years that followed. In 2023, Unity faced criticism from customers when it unveiled changes to its pricing structure, which it ultimately walked back. Then, in January 2024, the company said it was slashing 25% of its workforce as part of an effort to focus on long-term growth.

However, shares have soared 121% this year on a wave of renewed investor enthusiasm, far outstripping a 17% gain for the S&P 500 and a 22% gain for the tech-heavy Nasdaq Composite.

Piper Sandler analyst Thomas Champion became the latest analyst in Unity's corner as he upgraded shares of the software company to Overweight from Neutral on Thursday. He raised his price target to $59, up from $43.

The analyst cited a healthy mobile advertising market and the potential for accelerating growth in Unity's Vector AI platform, which promises to leverage an array of data from the Unity ecosystem to help developers acquire users.

Vector AI falls into Unity's Grow Solutions business segment, which it describes as a digital toolbox designed to help game developers with monetization and advertising.

"We see an opportunity for Grow segment to accelerate," Champion wrote Thursday, citing ad growth.

The analyst expects Unity to reach $2.6 billion in revenue by 2027. For reference, revenue came to $1.81 billion in 2024, down 17% from the prior year. Analysts polled by FactSet are looking for $1.83 billion for 2025, roughly flat year-over-year.

Champion isn't the only one who believes Unity is poised to get a boost on back of a strong advertising market. BTIG analyst Clark Lampen upgraded the stock to Overweight from Neutral with a $60 price target, up from $43.

Lampen, for one, believes Unity's inherent value isn't reflected in the current share price. Factors including a favorable mobile market backdrop "don't seem fully understood or discounted by the market," Lampen wrote. Taken together, he expects the catalysts to "set the stage for double-digit [percentage] growth in both revenue and user acquisition spend for several more years."

Unity Software has won the support of many analysts lately. Just last week, Wells Fargo upgraded the shares to Overweight from Equal Weight, citing a stronger industry outlook for 2026.

Thursday's gains put the stock on pace for its highest close since Aug. 18, 2022, when it ended the session at $51.14, according to Dow Jones Market Data.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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December 11, 2025 15:35 ET (20:35 GMT)

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