Is Unity Software Stock Built to Withstand More Downside?
Unity Software (U) stock is down 24.2% in a day. The recent slide reflects renewed concerns around Google’s Project Genie posing a competitive threat to its game development platform, but sharp drops like this often raise a tougher question: is the weakness temporary, or a sign of deeper cracks in the story?
Before judging its downturn reslience, let’s look at where Unity Software stands today.
- Size: Unity Software is a $12 Bil company with $1.8 Bil in revenue currently trading at $29.10.
- Fundamentals: Last 12 month revenue growth of -8.2% and operating margin of -27.5%.
- Liquidity: Has Debt to Equity ratio of 0.18 and Cash to Assets ratio of 0.28
- Valuation: Unity Software stock is currently trading at P/E multiple of -28.3 and P/EBIT multiple of -31.3
- Has returned (median) -10% within a year following sharp dips since 2010. See U Dip Buy Analysis.
These metrics point to a Moderate operational performance, alongside High valuation – making the stock Unattractive. For details, see Buy or Sell U Stock
That brings us to the key consideration for investors worried about this fall: how resilient is U stock if markets turn south? This is where our downturn resilience framework comes in. Suppose U stock falls another 20-30% to $20 – can investors comfortably hold on? Turns out, the stock saw an impact slightly better than the S&P 500 index during various economic downturns, based on (a) how much the stock fell and, (b) how quickly it recovered. Below, we dive deeper into each such downturn.
2022 Inflation Shock
- U stock fell 89.3% from a high of $201.12 on 18 November 2021 to $21.50 on 9 November 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- The stock is yet to recover to its pre-Crisis high
- The highest the stock has reached since then is $49.47 on 9 December 2025 , and currently trades at $29.10
| U | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -89.3% | -25.4% |
| Time to Full Recovery | Not Fully Recovered | 464 days |
2020 Covid Pandemic
- U stock fell 16.3% from a high of $119.00 on 6 November 2020 to $99.66 on 10 November 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 20 November 2020
| U | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -16.3% | -33.9% |
| Time to Full Recovery | 10 days | 148 days |
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