Unity’s Price Targets Cut to $37 and $38 After Q4 Beat, Shares Down 50%
Citizens cut Unity’s price target from $50 to $37 and Wells Fargo lowered its target to $38 after mixed Q4 beat on revenue & EBITDA but softer Q1 outlook. Unity’s Vector segment grew mid-teens q/q and Create rose 16% y/y, yet shares have slumped over 50% YTD, reflecting broader AI-driven sector concerns.
1. Price Target Adjustments
Analysts from Citizens cut Unity’s price target from $50 to $37 and Wells Fargo lowered its target to $38 but maintained their Outperform and Overweight ratings respectively, attributing the adjustments to mixed Q4 results and a more cautious Q1 outlook.
2. Q4 Results and Segment Performance
Unity beat its Q4 revenue and EBITDA guidance while flagging a slightly softer outlook for Q1 2026. Core segments showed momentum: the Vector segment grew mid-teens quarter-over-quarter, Create rose 16% year-over-year excluding non-strategic revenue, and initiatives like the Commerce Platform rollout, Unity 6 adoption, and runtime data integration are building operational traction with AI seen as a content-creation tailwind.
3. Stock Performance and Sector Context
Despite strong segment growth, Unity’s shares have slumped over 50% year-to-date, reflecting a broader software sell-off driven by investor concerns that AI tools could erode traditional subscription-based business models.