Market Pulse50Neutral

Unity Software Inc.Opportunity Rank #106(U) Intrinsic Value & DCF Analysis (2026)

Sector: Technology

Current Price

$18.65

Last updated: Mar 24, 2026

Price vs Intrinsic Value

$18.65
Price
$29.00
Intrinsic Value
Undervalued by 55%MOS: $23.20

Fundamental Score

65/100
Neutral

Weighted across 6 signals

Narrative Score

53/100
Weak

No change vs previous

The intrinsic value of Unity Software Inc. (U) is estimated at $29.00 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $18.65, the stock appears undervalued relative to its projected cash flow fundamentals. This estimate assumes a 14.43% long-term growth rate and a 10.00% discount rate (calculated: 9.70%), reflecting expected future free cash flow and cost of capital.

The intrinsic value of Unity Software Inc. (U) is estimated at $29.00 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $18.65, the stock appears undervalued relative to its projected cash flow fundamentals. This estimate assumes a 14.43% long-term growth rate and a 10.00% discount rate (calculated: 9.70%), reflecting expected future free cash flow and cost of capital.

Valuation Details

$29.00
▲ 55.50% upside
20% margin of safety: $23.20
Years: 10Growth Rate: 14.43%
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Capital Efficiency

Average Quarterly ROIC
-2.05%
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

65/100
NeutralWeighted across 6 signals
DCF Discount
55.5% discount to price
100
FCF Yield
5.5% trailing FCF yield
87
ROIC vs WACC
ROIC -2.0% vs WACC 9.0% (-0.2x)
0
Net Debt / FCF
0.5x net debt to FCF
89
Buybacks
Share count growing
30
FCF CAGR (5Y)
48.7% 5Y FCF CAGR
100
Strengths: DCF Discount, FCF Yield. Concerns: ROIC vs WACC, Buybacks.

Narrative Details

53/100
Weak
Vs 6-Month Baseline:High (87th pct)Weighted across 6 recent drivers
Trend: StableConfidence: 87%Updated: 1h ago
Sources: 80 (60 News · 20 Analyst)
Drivers(last 30 days)
42 news sentiment+0.5
12 regulatory scrutiny-0.4
Upgrade headlines+0.2
3 downgrade headlines-0.1
2 analyst upgrades+0.0
2 earnings beat+0.0

Investment Coach

Updated 14h ago
BUYConfidence: 54%
Thesis
Unity Software Inc. is undervalued with an estimated fair value 61.6% above its current price, supported by healthy free cash flow yield and constructive fundamentals. Despite trailing returns relative to its cost of capital, the company shows potential for growth with improving narrative scores.
Key Risk
The company's return on invested capital remains significantly below its weighted average cost of capital, indicating potential value destruction.
Signals To Watch
  • Monitor whether valuation discount remains above 10%.
  • Track ROIC vs WACC spread for sustained improvement.
  • Follow narrative trend for meaningful shifts in the score direction.
Ask the Coach - Available with
Historical Growth Rates
Free Cash Flow- - -Trend CAGR: 36.17%5 Year CAGR (Adjusted): 248.29%

Free Cash Flow (in millions)

TTM20252024202320222021202020192018
$442$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.