Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Unity (NYSE:U) and the best and worst performers in the design software industry.
The demand for rich, interactive 2D, 3D, VR and AR experiences is growing, and while the ubiquitous metaverse might still be more of a buzzword than a real thing, what is real is the demand for the tools to create these experiences, whether they are games, 3D tours or interactive movies.
The 6 design software stocks we track reported a mixed Q4. As a group, revenues beat analysts’ consensus estimates by 1.9% while next quarter’s revenue guidance was in line.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 14.3% since the latest earnings results.
Unity (NYSE:U)
Started as a game studio by three friends in a Copenhagen apartment, Unity (NYSE:U) is a software as a service platform that makes it easier to develop and monetize new games and other visual digital experiences.
Unity reported revenues of $457.1 million, down 25% year on year. This print exceeded analysts’ expectations by 5.9%. Overall, it was a satisfactory quarter for the company with an impressive beat of analysts’ billings estimates but revenue guidance for next quarter missing analysts’ expectations significantly.
Unity pulled off the biggest analyst estimates beat but had the slowest revenue growth of the whole group. Even though it had a relatively good quarter, the market seems discontent with the results. The stock is down 7.8% since reporting and currently trades at $19.71.
Is now the time to buy Unity? Access our full analysis of the earnings results here, it’s free.
Best Q4: Autodesk (NASDAQ:ADSK)
Founded in 1982 by John Walker and growing into one of the industry's behemoths, Autodesk (NASDAQ:ADSK) makes computer-aided design (CAD) software for engineering, construction, and architecture companies.
Autodesk reported revenues of $1.64 billion, up 11.6% year on year, in line with analysts’ expectations. The business had a very strong quarter with full-year guidance of accelerating revenue growth and a solid beat of analysts’ EBITDA estimates.
The stock is down 7.8% since reporting. It currently trades at $260.26.
Is now the time to buy Autodesk? Access our full analysis of the earnings results here, it’s free.
Weakest Q4: PTC (NASDAQ:PTC)
Used to design the Airbus A380 and Boeing 787 Dreamliner commercial airplanes, PTC’s (NASDAQ:PTC) software-as-service platform helps engineers and designers create and test products before manufacturing.
PTC reported revenues of $565.1 million, up 2.7% year on year, exceeding analysts’ expectations by 1.9%. Still, it was a softer quarter as it posted full-year EPS guidance missing analysts’ expectations.
PTC delivered the weakest full-year guidance update in the group. As expected, the stock is down 23.1% since the results and currently trades at $145.77.
Read our full analysis of PTC’s results here.
Adobe (NASDAQ:ADBE)
One of the most well-known Silicon Valley software companies around, Adobe (NASDAQ:ADBE) is a leading provider of software as service in the digital design and document management space.
Adobe reported revenues of $5.71 billion, up 10.3% year on year. This print surpassed analysts’ expectations by 1%. Zooming out, it was a mixed quarter as it also produced a decent beat of analysts’ EBITDA estimates.
The stock is down 18.4% since reporting and currently trades at $357.89.
Read our full, actionable report on Adobe here, it’s free.
Cadence (NASDAQ:CDNS)
With the name chosen to reflect the idea of a repeating pattern or rhythm in electronic design, Cadence Design Systems (NASDAQ:CDNS) offers a software-as-a-service platform for semiconductor engineering and design.
Cadence reported revenues of $1.36 billion, up 26.9% year on year. This number met analysts’ expectations. Taking a step back, it was a mixed quarter as it also logged a solid beat of analysts’ billings estimates but full-year revenue guidance slightly missing analysts’ expectations.
Cadence pulled off the fastest revenue growth among its peers. The stock is down 12.1% since reporting and currently trades at $264.
Read our full, actionable report on Cadence here, it’s free.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
Join Paid Stock Investor Research
Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.