---
title: "Why Unity Software Stock Soared on Wednesday"
description: "Unity Software's stock surged 12.7% after Jefferies analyst Brent Thill raised its price target by over 20% to $35, maintaining a buy recommendation. Thill noted improved ad spend expectations for 202"
type: "news"
locale: "en"
url: "https://longbridge.com/en/news/248842721.md"
published_at: "2025-07-16T18:25:04.000Z"
---

# Why Unity Software Stock Soared on Wednesday

> Unity Software's stock surged 12.7% after Jefferies analyst Brent Thill raised its price target by over 20% to $35, maintaining a buy recommendation. Thill noted improved ad spend expectations for 2025, with Unity's market share growing positively. Despite being unprofitable by GAAP standards, Unity generated $308 million in free cash flow over the last year, leading to a 45x price-to-free-cash-flow valuation. Analysts predict Unity's free cash flow could triple to nearly $1 billion by 2030, but a 26% annualized growth rate raises concerns about the stock's high valuation.

**Unity Software** (U 12.93%), a 3D graphics software specialist, rocketed 12.7% through 1:05 p.m. ET on Wednesday, and it's not hard to figure out why.

This morning, StreetInsider.com reported that Jefferies analyst Brent Thill raised his price target on Unity by more than 20% to $35 and reiterated his buy recommendation on the stock.

Image source: Getty Images.

## What Jefferies says about Unity

Citing data from his company's 2Q mobile game ad tech survey, Thill said "overall 2025 ad spend expectations improved off of April" and are now on course for nearly 4% year-over-year growth. Unity's share of this market is growing and "incrementally positive," leading the analyst to raise his earnings estimates for the stock -- and accordingly, his price target.

## Is Unity stock a buy?

Is this price target justified? Perhaps.

Unprofitable as calculated according to generally accepted accounting principles (GAAP), Unity does generate substantial positive free cash flow -- $308 million over the last 12 months. On a $14 billion stock, that works out to a 45x price-to-free-cash-flow valuation on the stock.

Expensive? Absolutely. And yet, the growth estimates for Unity stock are terrific and potentially terrific *enough* to make this stock a buy. Analysts polled by S&P Global Market Intelligence forecast Unity will more than triple its free cash flow (FCF) over the next five years to nearly $1 billion in 2030. If that's how things play out, the stock's seemingly excessive valuation could conceivably be justified.

Still, going from $308 million to just under $1 billion in five years works out to only a 26% annualized FCF growth rate. I'd prefer to see that go higher to justify the stock's 45x FCF valuation -- or for the stock to pull back a bit before buying any Unity stock myself.

### Related Stocks

- [U.US - Unity Software](https://longbridge.com/en/quote/U.US.md)

## Related News & Research

| Title | Description | URL |
|-------|-------------|-----|
| Why Unity Software (U) Stock Could Be Due for a Big Earnings Surprise | Why Unity Software (U) Stock Could Be Due for a Big Earnings Surprise | [Link](https://longbridge.com/en/news/272848182.md) |
| Unity Software Stock: A Deep Dive Into Analyst Perspectives (17 Ratings) | Unity Software (NYSE: U) has received evaluations from 17 analysts over the past three months, showing a mix of bullish  | [Link](https://longbridge.com/en/news/272868447.md) |
| This Unity Software Begins Coverage On A Bullish Note; Here Are Top 5 Initiations For Friday | Top Wall Street analysts have initiated coverage on several companies. B. Riley Securities' Rohit Seth rated Vulcan Mate | [Link](https://longbridge.com/en/news/272839105.md) |
| Unity Software Inc. $U Stock Position Boosted by Broad Peak Investment Advisers Pte Ltd | Broad Peak Investment Advisers Pte Ltd increased its stake in Unity Software Inc. (NYSE:U) by 43.6% in Q3, now holding 2 | [Link](https://longbridge.com/en/news/272238236.md) |
| After a 100% Rally, Can Unity Software Stock (U) Deliver More Gains in 2026? | Unity Software's stock (U) has surged over 100% this year, reaching around $45 per share. Analysts predict a moderate ga | [Link](https://longbridge.com/en/news/271137185.md) |

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> **Disclaimer**: This article is for reference only and does not constitute any investment advice.