Shares of Unity Software Inc (NYSE:U) came under pressure in early trading on Thursday, even after the company reported upbeat fourth-quarter results.

Here are the key analyst insights:

• Wedbush analyst Alicia Reese maintained an Outperform rating but cut the price target from $37 to $30.
• BTIG analyst Clark Lampen reiterated a Buy rating but slashed the price target from $60 to $41.

Check out other analyst stock ratings.

Wedbush: Unity Software reported total revenue of $503 million and adjusted EBITDA of $125 million. It topped consensus estimates of $489 million and $118 million, respectively. The results were overshadowed by soft guidance for the first quarter, Reese says.

Management guided to revenue of $480-$490 million and non-GAAP EBITDA of $110-$115 million. That’s below consensus of $491 million and $119 million, respectively. Apart from the "still looming perceived AI threat," the company is making a strategy shift "that undermines the structure of its business model," Reese wrote.

BTIG: The investor focus going into the print was on Vector/Unity Ads, where the company's 15% sequential growth fell short of expectations of 20%, Lampen said. Unity Software projected around 10% sequential Vector growth, missing BTIG's estimate of 12%-13%, he added.

Management is likely going to take "the long-expected step" of closing the ironSource ad operation, the analyst stated. "While we believe this is only one piece of the enterprise and the remaining businesses are growing, mix datapoints suggest ironSource will be a substantial headwind to ’26 revenue growth, but will also be a tailwind to profitability and margins for the year," he further wrote.

U Price Action: Shares of Unity Software had declined by 17.83% to $375.38 at the time of publication on Thursday.

Image: Shutterstock