Stifel adjusted its outlook on Unity Software (NYSE:U), raising the price target to $25 from $20 and maintaining a Buy rating. The increase follows Unity's announcement of a new definitive price structure, notably excluding the Unity Runtime Fee, a decision made under the leadership of new CEO Matt Bromberg.
Bromberg, who stepped into the CEO role in May, has made significant changes ahead of the company's upcoming Unite Developer Conference.
The removal of the Unity Runtime Fee marks an end to a contentious period for Unity and its clientele. Stifel's analyst believes that this new pricing strategy will help Unity reestablish trust within the gaming industry.
The Unite 2024 Barcelona conference, scheduled for next week, is expected to act as an informal introduction to Unity 6. The firm anticipates that the conference will shed light on the company's direction and future offerings.
Stifel's revised price target reflects a positive view on Unity's potential to stabilize and enhance visibility into its subscription revenue growth. The firm sees the pricing model adjustment as a strategic move that positions Unity for advancement in the market.
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