Market Pulse59Neutral

Unity Software Inc.Opportunity Rank #211(U) Intrinsic Value & DCF Analysis (2026)

Sector: Technology

Current Price

$26.73

Last updated: May 08, 2026

Price vs Intrinsic Value

$26.73
Price
$25.47
Intrinsic Value
Overvalued by 5%MOS: $20.38

Fundamental Score

50/100
Bearish

Weighted across 6 signals

Narrative Score

74/100
Strong

+2 vs previous

Trend Score

61/100
Constructive

As of 2026-05-08

The intrinsic value of Unity Software Inc. (U) is estimated at $25.47 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $26.73, the stock appears overvalued relative to its projected cash flow fundamentals. This estimate assumes an 11.27% long-term growth rate and a 10.29% discount rate, reflecting expected future free cash flow and cost of capital.

The intrinsic value of Unity Software Inc. (U) is estimated at $25.47 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $26.73, the stock appears overvalued relative to its projected cash flow fundamentals. This estimate assumes an 11.27% long-term growth rate and a 10.29% discount rate, reflecting expected future free cash flow and cost of capital.

Valuation Details

$25.47
▼ -4.71% downside
20% margin of safety: $20.38
Years: 10Growth Rate: 11.27%
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Capital Efficiency

Average Quarterly ROIC
-1.7%
Cost of Capital (estimated)9%
Value StatusUnderperforming Capital

The company is earning below its required return. This may indicate inefficient use of capital or excess cash that isn't being reinvested.

Complete historical ROIC is available with
.

Fundamental Details

50/100
BearishWeighted across 6 signals
DCF Discount
4.7% premium to price
42
FCF Yield
4.3% trailing FCF yield
57
ROIC vs WACC
ROIC -1.7% vs WACC 9.0% (-0.2x)
0
Net Debt / FCF
0.2x net debt to FCF
96
Buybacks
Share count growing
30
FCF CAGR (5Y)
52.4% 5Y FCF CAGR
100
Strengths: Net Debt / FCF, FCF CAGR (5Y). Concerns: ROIC vs WACC, Buybacks.

Narrative Details

74/100
Strong
+2 vs previous · +1 new driversVs 6-Month Baseline:High (92nd pct)Weighted across 6 recent drivers
Trend: Improving upConfidence: 100%Updated: 16h ago
Sources: 82 (54 News · 28 Analyst)
Drivers(last 30 days)
45 news sentiment+2.2
Earnings miss+0.3
5 regulatory scrutiny-0.2
Earnings beat+0.0
2 upgrade headlines+0.0
2 analyst upgrades+0.0

Trend Details

61/100
ConstructiveAs of 2026-05-08311 daily bars used
6M Relative Strength vs SPY-42.4%
Price vs 50 EMA+12.0%
Price vs 21 EMA+9.3%
Price vs 21 EMA90 · +9.3%
Price vs 50 EMA91 · +12.0%
21 EMA vs 50 EMA70 · +2.5%
3M RS vs SPY71 · +5.3%
6M RS vs SPY1 · -42.4%
Distance from 52W High14 · -43.1%

Investment Coach

Updated 14h ago
WATCHConfidence: 46%
Thesis
Unity Software Inc. currently trades at fair value with a strong and improving narrative score, but its returns are trailing the estimated cost of capital. Patience is advised as valuation is neutral and fundamentals show mixed signals with negative ROIC versus WACC spread.
Key Risk
The key risk is the company's negative spread between ROIC and WACC, indicating returns are not covering the cost of capital.
Signals To Watch
  • Price moving to at least a mid-teens discount to fair value
  • Sustained improvement in ROIC versus WACC spread
  • Meaningful shifts in the narrative score direction
Ask the Coach - Available with
Historical Growth Rates
Free Cash Flow- - -Trend CAGR: 36.79%5 Year CAGR (Adjusted): 255.76%

Free Cash Flow (in millions)

TTM20252024202320222021202020192018
$499$442$358$291-$2-$70$61-$41-$43

How Intrinziq Estimates Fair Value

Intrinziq estimates Unity Software Inc.'s intrinsic value using a discounted cash flow (DCF) model based on free cash flow trends and a market-based discount rate. The model projects future cash flows over ten years and discounts them using a market return assumption to estimate fair value.

Unity Software Inc.Technology

Unity Software Inc. creates and operates an interactive real-time 3D content platform. Its platform provides software solutions to create, run, and monetize interactive, real-time 2D and 3D content for mobile phones, tablets, PCs, consoles, and augmented and virtual reality devices. The company serves content creators and developers, artists, designers, engineers, and architects to create interactive and real-time 2D and 3D content. It offers its solutions directly through its online store, field sales operations, independent distributors, and resellers in the United States, Denmark, Belgium, Canada, China, Colombia, Finland, France, Germany, Ireland, Israel, Japan, Lithuania, Portugal, Singapore, South Korea, Spain, Sweden, Switzerland, and the United Kingdom. The company was founded in 2004 and is headquartered in San Francisco, California.