$U Benchmark

"We are initiating coverage of Unity with a Sell rating and $27 PT. Unity's a global platform for creating and monetizing interactive RT3D content that enables game creation, mobile game advertising, and the metaverse. We suspect sustained economic malaise, post-pandemic normalization on player engagement and user acquisition, and rationalized spend scenarios could be a challenging environment for Unity's growth profile. We believe the metaverse hype punctuated the peak of a momentum market that has now expired, and we think speculative interest in the secular trade will continue to fade as market conditions shift investor interest elsewhere. Unity was a pandemic darling that has now entered a less optimal operating scenario."