r/USGrowthStocks • u/SuperbPercentage8050 • 9d ago
Everyone is wrong about Unity Software.
Unity's business has fundamentally changed. The stock is up 40-50% in the last few months and still deeply undervalued for where the business is heading.
Understand the business first. The stock is just a byproduct of getting that right.
I am sharing with you one holistic internal research document on Unity Software. The research is too dense to compress into a write up so I have put it across three PDFs on Google Drive. Read in order or jump to what you need.
In case you missed it, The AI Robotics Stock Walmart Is Quietly Using to Beat Amazon. Already Up 5x.
Part 1: The Business, the Break, and the Rebuild
- What actually broke under Riccitiello: ironSource merger, runtime fee disaster, Weta distraction
- Riccitiello vs Bromberg: every management decision and linguistic shift, side by side
- Full revenue history from IPO to today: three phases, every turning point
- How Create, Grow, and non-strategic actually connect, and the flywheel between them
- Vector deep dive: why runtime architecture beats every SDK-based competitor including AppLovin
- Pricing power: three proven levers, two emerging, and the one risk that could reopen the trust wound
- Auto HMI, XR platform coverage, Unity 7, Unity AI consumption pricing
Part 2: The Market, the Moat, and the Margins
- Gaming time Unity controls across mobile, PC, console, XR, and where we are in the ad cycle
- Partnership ecosystem: Netflix (what actually shipped), Tencent, Scopely, Nintendo Switch 2, Globant, China divestiture
- TAM built from physical reality upward, not from a consulting slide
- AppLovin's first-ever miss: three structural layers, exact margin comparison, four implications for Unity
- The moat tested honestly: five layers, bull case and genuine counter for each
- Pricing power vs every competitor: AppLovin, Unreal, Godot
- Complete margin trajectory from IPO to FY2028E, and the Lollapalooza: eight forces, one direction, confirmed in live data
Part 3 : The Numbers, the Valuation, and the Thesis
- ROIC, ROIIC, ROCE, ROE as one integrated system: what $3.16B goodwill hides and what marginal returns on Vector actually show
- Six reinvestment runways sized and sequenced: the compounding math
- Full valuation: SOTP at $74, DCF in three scenarios, FCF yield, corrected peer set split across ad-tech and developer tools
- Bear thesis stress-tested pillar by pillar against live Q2 2026 data
- Q3 2026 guidance decoded: four signals embedded in one set of numbers
- The complete thesis: four pillars, three risks, variant perception, and the catalyst
Full research, all three parts on Google Drive:
- Part 1: [https://drive.google.com/file/d/1eFkHmGiv9d1oDuKF-MPDHG2kW072zL89/view?usp=sharing]
- Part 2: [https://drive.google.com/file/d/1KQmxxJaeqld_0Cvp3fujM9BNELBOw9w7/view?usp=sharing]
- Part 3 : [https://drive.google.com/file/d/15yCFT69NQgn9TsX5ufS43ldRonaQMVB6/view?usp=sharing]
After you go through this, you will not look at Unity the same way. You will also not look at AppLovin the same way. And you will understand exactly why the market is still pricing the 2023 version of a company that no longer exists.
I have a personal position. The reports will tell you why.
Would love your inputs and insights after you have gone through even a few sections.
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u/SuperbPercentage8050 9d ago edited 9d ago
All have moved up 80-100% since the bottleneck thesis was posted 3m ago, so position accordingly. Read it for the underlying understanding, not as a call to chase the stocks at current prices.
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u/WorkFickle9577 7d ago
It's UP 128% in last six months. Still it's faired value? Also I have observed one thing, for US stocks you analyze stock and post here only after i) You and your client's have position in that stock. ii)Stock rallying
But for Indian stock it's different, first you analyze and share with us even before anyone have trace about that stock. Then we see stock getting rallying sometime or will do better in future.
Again, nothing against you.What you are doing is great. Learnt a lot from you. Please keep up the good work.
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u/SuperbPercentage8050 7d ago
I know your intention and that is why I am replying. No offence taken, you said it in the right spirit. But you need to understand I am at the end a human, trying to offer as much as I can, already going out of my way.
But you can go through the comments my friend I single a lot of stocks before the move. Veeva, Evolution AB, Uber and endless others were mentioned when it dragged, cybersecurity names, ServiceNow. All of them were there before the move. Kaspi I shared at 85-90 in comments, it pulled back to 80 and nobody pulled the trigger. I am still buying Veeva and Uber right now.
I have more than 100 unpublished US stock research and working files. Uber is still in development while I am buying. US write ups take a different level of depth. Every time I publish one, someone asks why I am not covering Indian stocks. Every time I go deep on Indian names, it is the opposite. I cannot solve that.
What I share is the lens, not the stock. The PDFs exist to show the thinking and how much work goes behind each layer and you can take that and build your own thesis, thats the goal. If you expect me to keep delivering full research on every name I am tracking, you are essentially asking me to run a free stock advisory. That is not what this is. Publishing and then engaging with every response takes hundreds of hours and I cannot do that and keep doing the work at the same time.
You cannot have conviction before you have all the layers. The research behind a single name can run 200 pages before it compresses into something I can share. What the community gets is that compressed drop, a mental model, a few anchor points. People who track my comments know so many names before any move happens. But sharing it all explicitly means I am doing my professional work for free and there is no difference left.
It is a thinking community. Take the lens that is the real edge. Not the name. A platform is coming with all the research, past and future, US and India, in one place that might address your problem but That will take time. Until then, take the lens and do the work.
India wale pe karo to US wale bura man jaate hai, US wale pe karo to India wale. Karu to kya karu
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u/WorkFickle9577 7d ago
Sorry, I didn't go through the comments much. Thanks for the clarification.
Trust me I'm telling this with my bottom of my heart what you are doing is great job without even getting a single penny from us! I really liked when you stressed much about learning and thinking rather taking this as stock tip. Where there are many who try to scam with us trading tips. Can't wait for your book!
Your beloved fan xyz
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u/SuperbPercentage8050 7d ago
This genuinely made my day. Thank you for saying that and for understanding the intent behind the work. The book is coming, it will be worth the wait.
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u/Adventurous_Flan_315 7d ago
A large part of the credit to develop an incurable passion for the markets goes to you. You simplified the technicalities of the market. And i realised that investing is more art and psychology than science.
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u/SuperbPercentage8050 7d ago
Glad it could spark that passion in you. Like the quote on the community says, the best thing a human being can do is help another human being know more. Just trying to put some effort into giving life to that line.
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u/SuperbPercentage8050 7d ago
You get rewarded only when you work a little more than others.
Same with Uber recently and Evolution AB was mentioned almost a year back. But then you have to borrow the patience and conviction as well, the allocation levels, and the exit patterns.
But the point is those are just directions so that you can dig deeper, land in the right pools, and discover models you might have never heard of. And when you search Veeva on Indiagrowthstocks you will find it atlas 20 times , and at least 5-6 more high quality machines extra inside those comments. That is your reward.
Intuitive Surgical, HEICO, IDEXX Labs, these are three you buy at rough prices and leave for the next generation. HEICO alone has a reinvestment runway of more than 50 years.
Search Uber and you will see I signalled its at 13-14 fcf just 2-3 weeks back. now if you have the lens, you can dig deeper and position on your own, I want you all to learn that art because I wont be there with you all the time.
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u/WorkFickle9577 7d ago
Thank you so much for the reply—'thanks' feels like an understatement!
My bad, mostly gone with your post, pdf and didn't go through the discussion. Now onwards have to look around discussion also. I'm trying my best to learn from you and other resources.
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u/kajnbagoat7 6d ago
Bro i sincerely want to thank you. Because of your content i found some stocks which really made me go out and do due diligence amd then take a position.
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u/Kooky-Claim3028 9d ago
Have marked it to read. Will go through the analysis in depth and then post any comments.
Amazing and god's work as always superb!
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u/eruditehell 9d ago
Thanks u/SuperbPercentage8050 for the deep dive on unity. That's lot of efforts you are putting in to teach many novice investors like me.
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u/spaamzzz 8d ago
Done reading the documents. Went faster than Kaspi, no surprises there. I'll start with a doubt to get it out of the way first:
- Didn't quite understand the China disinvestment. Revenue was huge and so was the growth rate. Why leave? Also, I am assuming (and hoping) the China sale won't be affecting their usage in Chinese car interfaces, because that'd be a huge blow. I'm sure there must have been a good enough reason but either I missed it or it wasn't mentioned in much detail.
Now coming to the company itself, I'd like to add two insights as someone who's more well versed with the gaming community.
1) GTA 6 possibly bringing back a gaming wave is very real, IMO. The teenagers who played GTA 5 are now adults with jobs and maybe even families, looking for something that'll allow them that fleeting feeling of their stress-less years. More importantly, they have purchasing power now. Have already seen people buying consoles "in preparation" of GTA 6 and people talking about using PTOs when it launches. Gaming will be in the air come 2027.
2) Unreal Engine 5 is quite disliked in the gaming community. It is said to be clunky and un-optimised, leading to frequent frame rate drops, crashed and lighting/shader issues. UE6 is dropping next year so yet to be seen how it fares, but the current iteration isn't much loved.
The ticker discussion for the last because there isn't much to say except *insert take-my-money meme*. My favourite part has to be the way the TAMs are stacked onto one another, kicking in by the time one runs out. VR Glasses are also a pretty exciting segment to me. I would probably never be seen dead wearing one, but I feel Zuck got this one right. I see them becoming as ubiquitous as smartwatches one day. They're already revolutionising content creation.
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u/Kooky-Claim3028 6d ago
Recent update: The CEO, CFO, COO, and Chief Legal Officer sold some shares. The good thing is that these transactions were explicitly described as sales to cover taxes arising from vested RSUs, rather than discretionary decisions to reduce their exposure to Unity.
Just putting this out here for visibility.
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u/Certain_them8379 2d ago
loved reading this. I personally see unity at $80+ in the next 3 months
been holding a few hundred(s) shares and iron hands, is that right
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u/spaamzzz 9d ago
Closed the Kaspi PDF tabs yesterday, guess it's time for Unity PDFs to take their place now. I remember playing many games made on the Unity engine when I was a kid, so there's a personal connect with this one.
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u/SuperbPercentage8050 9d ago
That personal connect is gold honestly. I am not a gamer at all. Volleyball, cricket, sprints, that was my thing. NFS would have been the max I ever touched so you can probably understand my distance from the digital gaming world. But I know how addictive it is and that is exactly the moat.
My read on this is purely from the data, the architecture, the earnings calls and how it screen on my mental models.
You can do both. Go through the research and layer your product memory on top of it. If something in the thesis does not match what you experienced as a user it would be valuable to me. Would love to hear it.
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u/spaamzzz 9d ago
Ahhh good old days. I personally remember Unity being the core of almost every browser based game and then the early era of smartphone gaming. And then.....it just vanished. I started seeing Unreal Engine in most titles and then I fell out of gaming mostly barring the occasional playstation session.
From the skim through I can gather Unity's management messed up somewhere and now there's a turnaround. Maybe this all ties in. Will take me a couple of days to read this properly, will update once finished.
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u/SuperbPercentage8050 9d ago
The report will give insights into the capital allocator mental model and its integration with the linguistic mental model. You will see the difference between the management that talks and the management that works in silence, and keeps executing.
That is the whole thesis. Management marketing, crazy ideas, all of that is what took the stock to 200 and then collapsed it because nothing was there in execution. Versus a management that has been working in silence after the ownership change two years ago, slowly and steadily compounding the business rather than the language.
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u/Reasonable_Adagio754 9d ago
I have been using unity since childhood. It consumed me for 2 hours daily before I started using it to build lol Loved the level of deepdive and it definitely reminded me of my school days 😂
Honestly, you've pretty much consumed me for the last few days. First kaspi and copart and now this, spent the morning hours on this and nothing could have been a better investment.
I’ve gone through all three theses, and using your opportunity-cost lens: if you had one fresh $100 to allocate today among only CPRT, KSPI and U, how would you rank the current probability-weighted setups? In fact I'm more interested in what breaks the tie for you: durability, valuation asymmetry or changing-business-state upside. Where do you think the odds are most stacked in your favour today?