Critical Comparison: Unity Software (NYSE:U) versus ON24 (NYSE:ONTF)

ON24 (NYSE:ONTF) and Unity Software (NYSE:U) are both computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, dividends, risk, profitability and earnings.

Earnings and Valuation

This table compares ON24 and Unity Software”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ON24	$148.08 million	2.27	-$42.16 million	($0.74)	-10.76
Unity Software	$1.81 billion	10.54	-$664.11 million	($1.05)	-42.53

ON24 has higher earnings, but lower revenue than Unity Software. Unity Software is trading at a lower price-to-earnings ratio than ON24, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

83.9% of ON24 shares are held by institutional investors. Comparatively, 73.5% of Unity Software shares are held by institutional investors. 33.0% of ON24 shares are held by company insiders. Comparatively, 3.6% of Unity Software shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

ON24 has a beta of 0.61, indicating that its share price is 39% less volatile than the S&P 500. Comparatively, Unity Software has a beta of 2.04, indicating that its share price is 104% more volatile than the S&P 500.

Profitability

This table compares ON24 and Unity Software’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ON24	-22.09%	-18.61%	-11.82%
Unity Software	-24.15%	-9.45%	-4.50%

Analyst Ratings

This is a summary of current ratings and price targets for ON24 and Unity Software, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ON24	1	5	0	0	1.83
Unity Software	2	8	12	1	2.52

ON24 presently has a consensus price target of $7.40, indicating a potential downside of 7.09%. Unity Software has a consensus price target of $44.32, indicating a potential downside of 0.75%. Given Unity Software’s stronger consensus rating and higher probable upside, analysts clearly believe Unity Software is more favorable than ON24.

Summary

Unity Software beats ON24 on 9 of the 15 factors compared between the two stocks.

About ON24

ON24, Inc. provides a cloud-based intelligent engagement platform that enables businesses to convert customer engagement into revenue through interactive webinar, virtual event, and multimedia content experiences worldwide. The company provides ON24 Elite, for live and interactive webinar experience; ON24 Breakouts, for live breakout room experience that facilitates networking, collaboration, and interactivity between users; ON24 Forums, for live and interactive experience, which facilitates video-to-video interaction between presenters and audiences; ON24 Go Live, for live and interactive video event experience that enables presenters and attendees to engage face-to-face in real-time; and ON24 Virtual Confrence, for live and large scale managed virtual event experience. It also offers ON24 Engagement Hub, for always-on multimedia content experience; ON24 Target, for personalized and curated landing page experience; ON24 Intelligence, for analytics backbone that captures first-person data to power the insights, benchmarking, reporting, and artificial intelligence and machine learning engine; ON24 AI-powered ACE, for enabling hyper-personalization at scale across ON24 experiences; ON24 Connect, for ecosystem of third-party application integrations; and ON24 Services and Platform Support, which provides a portfolio of professional services that provide consulting and support for product and platform adoption. In addition, the company offers consulting services, such as experience management, monitoring and production, implementation, and other support services. It sells its products through direct sales. The company serves technology, financial services, healthcare, industrial and manufacturing, professional services, and business-to-business information service companies. The company was formerly known as NewsDirect, Inc. and changed its name to ON24, Inc. in December 1998. ON24, Inc. was incorporated in 1998 and is headquartered in San Francisco, California.

About Unity Software

Unity Software Inc. operates a real-time 3D development platform. Its platform provides software solutions to create, run, and monetize interactive, real-time 2D and 3D content for mobile phones, tablets, PCs, consoles, and augmented and virtual reality devices. The company offers its solutions directly through its online store and field sales operations in North America, Denmark, Finland, the United Kingdom, Germany, Japan, China, Singapore, and South Korea, as well as indirectly through independent distributors and resellers worldwide. The company was founded in 2004 and is headquartered in San Francisco, California.