July 16, 2024


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Unity Software stock jumps 10% as analysts credit it with skirting Apple’s ad tracking changes

Unity Software shares rose Wednesday after analysts applauded the gaming-software company’s growth and its ability to dodge a major change Apple made to tracking online ads with App Tracking Transparency.

Apple's App Tracking Transparency

Wallace Witkowski for Yahoo Finance:

Wedbush analyst Michael Pachter, who has an outperform rating and raised his price target to $129 from $125, expects “significant top-line growth for several years” from Unity after it pulled off an end-around with Apple Inc.. Earlier in the year, Apple opted out of using Identifier for Advertisers, or IDFA, in its privacy update, a move that worried many companies such as Facebook Inc. that rely upon ad revenue. IDFA is like a cookie that’s attached to a specific device like a smartphone rather than a browser to collect user information to better target ads.

Pachter noted that Unity’s Operate Solutions business, which helps developers make money on their games and content through ads, drove much of the company’s growth as it worked around the IDFA change by using ad models that didn’t rely on data from Apple but used data from an end user’s engagement and platform performance data.

“As a result, the Unity platform is able to analyze 50 billion in-app events on a daily basis across 20 different platforms, offering customers access to vast amounts of data,” Pachter said…

“We think Unity will likely stand to continue to benefit from the changing advertising ecosystem due to being able to leverage data from 3B+ [monthly active users] using Unity developed apps to generate better ROI compared to its peers,” [Barclays analyst Mario] Lu said.

MacDailyNews Take: Again, as we wrote last week to paraphrase Dr. Ian Malcolm: Advertising finds a way.

Two things will survive the apocalypse: Cockroaches and advertising.