Freedom Capital Markets initiated coverage on Unity Software (NYSE:U) with a "Buy" rating. The firm set a price target of $52.00, suggesting an approximate 24% upside from the company's previous closing price.
The positive outlook stems from the promising early traction of Unity's Vector AI technology. Analysts believe the AI solution will provide a significant and sustained boost to Unity's advertising portfolio.
Freedom Capital Markets arrived at the valuation using an 8.6x enterprise value-to-revenue multiple. The firm applied this multiple to its fiscal year 2028 revenue estimate, justifying the premium based on the potential of the AI solutions.