This morning, Unity (U) released a statement announcing its plans to slash the workforce by about 8% – doing away with 600 jobs.
This is part of a larger restructuring effort, as the video game software developer is working hard to achieve long-term, profitable growth. The company is rethinking the structure of specific teams within the company.
And, this is just the most recent round of layoffs Unity has undergone so far in 2023. The company let go of an additional 284 workers in January to kick off the year. Looking back to last year, Unity also laid off 225 workers in June of 2022.
Unity isn’t the only tech company trimming the fat from its workforce, as dozens of others have had to make similar changes. All of this comes from a slowing economy, and in the longer term, a looming recession.
The news hasn’t done much to the stock so far in Wednesday’s trading session. But, share prices are down more than 27% in the last 3 months. And really, since the company went public just 3 years ago in 2020, it’s been a steady ride to the bottom. Unity reached a high point of $196 in November of 2021, but today sits at just $25/share.
If you’re currently invested in this company, you may be wondering if these layoffs bode well for you – or if there is a reason to cut losses and move on to another opportunity. Below, we’ll take a look at Unity through the VectorVest stock analyzing software to help you gain a clear, confident next move.
Despite Fair Upside Potential, U Has Poor Safety & Very Poor Timing
The VectorVest system simplifies your trading strategy, telling you what to buy, when to buy it, and when to sell it. It’s all based on a proprietary stock rating system, which is comprised of 3 ratings. These are relative value (RV), relative safety (RS), and relative timing (RT).
Each of these ratings sits on a scale of 0.00-2.00, with 1.00 being the average. This allows for effortless interpretation, as you can simply pick stocks with above-average ratings to win more trades.
But, it gets even easier. Because based on the overall VST rating for a given stock, Vectorvest issues a clear buy, sell, or hold recommendation - at any given time. As for U…
- Fair Upside Potential: The RV rating is a comparison of a stock’s 3-year price projection to AAA corporate bond rates and risk. And right now, the RV rating of 0.88 is below the average, but considered fair nonetheless. With that said, the stock is overvalued at today’s share price - with a current value of just $11.
- Poor Safety: An indicator of risk, the RS rating analyzes a company’s financial consistency & predictability, debt-to-equity ratio, and business longevity. As for U, the RS rating of 0.57 is poor.
- Very Poor Timing: The biggest issue for U right now is the very poor RT rating of 0.35 - suggesting a strong, negative price trend will continue putting downward pressure on the stock’s price. This rating is based on the direction, dynamics, and magnitude of the stock’s price movement. It’s taken day over day, week over week, quarter over quarter, and year over year.
In the end, U has an overall VST rating of 0.61 - which is considered poor. So, does that mean it’s officially time to let this stock go from your portfolio and move on? Or, are these layoffs going to be the key to unlocking consistent, profitable growth in the near future?
No need to play the guessing game or let emotion influence your decision-making! Get a clear answer on your next move with a free stock analysis at VectorVest today.
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VectorVest advocates buying safe, undervalued stocks, rising in price. As for U, the upside potential is below the average, but considered fair nonetheless - but that’s where the good news ends. The stock also has poor safety and very poor timing holding it back.
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