Unity Software Inc. and Figma, Inc. are two dynamic players in the software application industry, each driving innovation through powerful platforms for creators and developers. Unity excels in real-time 3D content across multiple devices, while Figma leads with collaborative design tools for user interfaces. Their market overlap and cutting-edge strategies make them compelling investment candidates. In this article, I will help you identify which company offers the most promising opportunity for your portfolio.
Table of contents
Companies Overview
I will begin the comparison between Unity Software Inc. and Figma, Inc. by providing an overview of these two companies and their main differences.
Unity Software Inc. Overview
Unity Software Inc. creates and operates a real-time 3D content platform designed for interactive applications across mobile phones, tablets, PCs, consoles, and AR/VR devices. The company targets content creators such as developers, artists, and designers, offering software solutions to build, run, and monetize 2D and 3D content globally. Founded in 2004 and based in San Francisco, Unity is a major player in the application software industry.
Figma, Inc. Overview
Figma, Inc. develops a browser-based collaborative design tool aimed at user interface design and product development teams. Its offerings include design, prototyping, feedback gathering, and AI-assisted tools to streamline workflows. Founded in 2012 and headquartered in San Francisco, Figma serves the software application sector with a focus on enhancing team collaboration and productivity in digital design.
Key similarities and differences
Both companies operate in the software application industry and are headquartered in San Francisco, targeting creative and development professionals. Unity focuses on real-time 3D content creation and monetization across multiple platforms, while Figma emphasizes browser-based collaborative design and prototyping tools. Unity has a larger workforce with 4,987 employees compared to Figma’s 1,646, reflecting differences in scale and operational focus.
Income Statement Comparison
This table compares the key income statement metrics for Unity Software Inc. and Figma, Inc. for the fiscal year 2024, providing a snapshot of their financial performance.
| Metric | Unity Software Inc. (U) | Figma, Inc. (FIG) |
|---|---|---|
| Market Cap | 17.5B | 14.4B |
| Revenue | 1.81B | 749M |
| EBITDA | -235M | -870M |
| EBIT | -644M | -877M |
| Net Income | -664M | -732M |
| EPS | -1.68 | -3.11 |
| Fiscal Year | 2024 | 2024 |
Income Statement Interpretations
Unity Software Inc.
Unity Software’s revenue grew substantially by 135% from 2020 to 2024 but declined by 17.1% in the latest year, signaling deceleration. Gross margins remained strong at 73.48%, yet operating and net margins stayed negative, though net margin improved slightly. In 2024, the company reduced losses with a 16.77% EBIT growth and a 22.22% EPS increase, reflecting some operational recovery.
Figma, Inc.
Figma reported a 48.36% revenue increase from 2023 to 2024, accompanied by a favorable gross margin of 88.32%. However, operating and net margins were deeply negative, worsening significantly in 2024. Earnings before interest and taxes declined sharply, with net income dropping substantially, indicating that profitability remains a critical challenge despite top-line growth.
Which one has the stronger fundamentals?
Both companies exhibit unfavorable overall income statement evaluations with strong revenue growth but persistent net losses. Unity shows a larger revenue base and some improvement in profitability metrics, while Figma’s higher gross margin contrasts with a more severe decline in net income and EPS. Neither company currently demonstrates robust profitability, underscoring elevated risk for investors seeking stable earnings.
Financial Ratios Comparison
The table below presents the most recent financial ratios for Unity Software Inc. and Figma, Inc. as of fiscal year 2024, offering a direct comparison of their key performance and financial health indicators.
| Ratios | Unity Software Inc. (U) | Figma, Inc. (FIG) |
|---|---|---|
| ROE | -20.8% | -55.3% |
| ROIC | -12.8% | -59.7% |
| P/E | -13.4 | -70.7 |
| P/B | 2.79 | 39.10 |
| Current Ratio | 2.50 | 3.66 |
| Quick Ratio | 2.50 | 3.66 |
| D/E (Debt-to-Equity) | 0.74 | 0.02 |
| Debt-to-Assets | 34.9% | 1.6% |
| Interest Coverage | -32.1 | 0 |
| Asset Turnover | 0.27 | 0.42 |
| Fixed Asset Turnover | 18.35 | 17.09 |
| Payout ratio | 0 | 0 |
| Dividend yield | 0 | 0 |
Interpretation of the Ratios
Unity Software Inc.
Unity exhibits several unfavorable profitability ratios, including a net margin of -36.63% and return on equity at -20.81%, indicating ongoing losses and weak returns on shareholder equity. The company shows favorable liquidity with a current ratio of 2.5, but its interest coverage is negative, reflecting financial strain. Unity does not pay dividends, likely due to its negative net income and reinvestment strategy focused on growth and development.
Figma, Inc.
Figma’s ratios reveal significant profitability challenges, with a net margin of -97.74% and a return on equity of -55.29%, highlighting steep losses. Although it benefits from a low debt-to-equity ratio of 0.02 and favorable weighted average cost of capital at 4.76%, its price-to-book ratio is very high at 39.1, suggesting overvaluation concerns. Figma also does not pay dividends, consistent with its high-growth phase and prioritization of research and product expansion.
Which one has the best ratios?
Both companies face profitability difficulties, but Unity shows slightly better global ratio evaluations with 28.57% favorable ratios versus Figma’s 42.86% yet higher unfavorable ratios at 57.14%. Unity’s stronger liquidity contrasts with Figma’s high valuation multiples, indicating different risk profiles but neither company currently demonstrates a robust financial position.
Strategic Positioning
This section compares the strategic positioning of Unity Software Inc. and Figma, Inc., focusing on market position, key segments, and exposure to technological disruption:
Unity Software Inc.
- Leading interactive real-time 3D platform with global reach, facing high competition in software applications.
- Key segments include Create Solutions and Operate Solutions, driving revenue through content creation and monetization.
- Operates in rapidly evolving 3D and AR/VR content space, requiring constant innovation to address technological shifts.
Figma, Inc.
- Browser-based UI design tool targeting design and development teams, entering competitive design software market.
- Focuses on collaborative design tools and AI-driven prototyping, targeting product development teams.
- Faces disruption risk from evolving AI and browser technologies impacting UI/UX design tools and workflows.
Unity Software Inc. vs Figma, Inc. Positioning
Unity exhibits a diversified business model spanning content creation and operation solutions, while Figma concentrates on collaborative design tools and AI-enhanced prototyping. Unity’s broader segment base contrasts with Figma’s focused product suite, each with distinct market demands and innovation challenges.
Which has the best competitive advantage?
Both companies show very unfavorable MOAT evaluations with declining ROIC trends, indicating value destruction and lack of sustainable competitive advantage based on current profitability metrics. Neither demonstrates a clear edge in capital efficiency.
Stock Comparison
The past year reveals contrasting price dynamics between Unity Software Inc. and Figma, Inc., with Unity showing sustained bullish momentum and Figma experiencing a sharp bearish decline.
Trend Analysis
Unity Software Inc. exhibited a bullish trend over the past 12 months, with a 31.0% price increase, accelerating growth, and a volatility measure (std. deviation) of 9.04. The stock reached highs of 46.42 and lows of 15.32.
Figma, Inc. displayed a bearish trend over the same period, with a 75.76% price drop and accelerating decline. Its volatility was notably higher at 19.95, with prices ranging from 29.57 to 122.0.
Comparing the two, Unity Software delivered the highest market performance with a 31.0% gain, while Figma suffered a steep 75.76% loss, marking a significant divergence in investor sentiment and price trajectory.
Target Prices
The current analyst consensus provides a clear outlook on target prices for Unity Software Inc. and Figma, Inc.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Unity Software Inc. | 60 | 39 | 50.98 |
| Figma, Inc. | 52 | 38 | 43.6 |
Analysts expect Unity Software’s price to rise notably above its current 40.95 USD, while Figma’s consensus target is also well above its current 29.57 USD, signaling potential upside for both stocks.
Analyst Opinions Comparison
This section compares analysts’ ratings and grades for Unity Software Inc. and Figma, Inc.:
Rating Comparison
Unity Software Inc. Rating
- Rating: D+, classified as Very Favorable overall
- Discounted Cash Flow Score: 1, Very Unfavorable
- Return on Equity Score: 1, Very Unfavorable
- Return on Assets Score: 1, Very Unfavorable
- Debt To Equity Score: 1, Very Unfavorable
- Overall Score: 1, Very Unfavorable
Figma, Inc. Rating
- Rating: C+, classified as Very Favorable overall
- Discounted Cash Flow Score: 4, Favorable
- Return on Equity Score: 1, Very Unfavorable
- Return on Assets Score: 1, Very Unfavorable
- Debt To Equity Score: 4, Favorable
- Overall Score: 2, Moderate
Which one is the best rated?
Based strictly on the data, Figma holds a better overall rating (C+) and higher scores in discounted cash flow and debt-to-equity, while Unity shows uniformly very unfavorable scores except a moderate price-to-book score.
Scores Comparison
Here is a comparison of the Altman Z-Score and Piotroski Score for Unity Software Inc. and Figma, Inc.:
Unity Software Inc. Scores
- Altman Z-Score: 2.93, in the grey zone indicating moderate bankruptcy risk.
- Piotroski Score: 4, classified as average financial strength.
Figma, Inc. Scores
- Altman Z-Score: 14.34, in the safe zone indicating very low bankruptcy risk.
- Piotroski Score: 4, classified as average financial strength.
Which company has the best scores?
Figma has a significantly higher Altman Z-Score, placing it firmly in the safe zone, while Unity Software is in the grey zone. Both have the same average Piotroski Score of 4. Thus, Figma shows stronger financial stability based on these scores.
Grades Comparison
Here is the comparison of recent grades and ratings from reputable financial institutions for both companies:
Unity Software Inc. Grades
The following table summarizes the latest grades and actions by major grading companies for Unity Software Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Morgan Stanley | Maintain | Overweight | 2026-01-13 |
| Goldman Sachs | Maintain | Neutral | 2026-01-13 |
| Wells Fargo | Maintain | Overweight | 2026-01-08 |
| Jefferies | Maintain | Buy | 2026-01-05 |
| Piper Sandler | Upgrade | Overweight | 2025-12-11 |
| BTIG | Upgrade | Buy | 2025-12-11 |
| Wells Fargo | Upgrade | Overweight | 2025-12-05 |
| Arete Research | Upgrade | Buy | 2025-12-01 |
| Citigroup | Maintain | Buy | 2025-11-11 |
| Wells Fargo | Maintain | Equal Weight | 2025-11-07 |
Unity Software Inc. shows a strong positive trend with multiple recent upgrades and a consensus leaning toward Buy or Overweight ratings from respected firms.
Figma, Inc. Grades
The following table presents the most recent grades and actions from recognized grading companies for Figma, Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Morgan Stanley | Maintain | Equal Weight | 2026-01-15 |
| Wells Fargo | Upgrade | Overweight | 2026-01-08 |
| RBC Capital | Maintain | Sector Perform | 2026-01-05 |
| Goldman Sachs | Maintain | Neutral | 2025-11-07 |
| JP Morgan | Maintain | Neutral | 2025-11-06 |
| Piper Sandler | Maintain | Overweight | 2025-11-06 |
| Wells Fargo | Maintain | Equal Weight | 2025-11-05 |
| Wells Fargo | Maintain | Equal Weight | 2025-09-04 |
| Morgan Stanley | Maintain | Equal Weight | 2025-09-04 |
| RBC Capital | Maintain | Sector Perform | 2025-09-04 |
Figma, Inc.’s grades mostly remain stable with a mix of Equal Weight and Neutral ratings, including a few Overweight, showing a more cautious outlook compared to Unity Software.
Which company has the best grades?
Unity Software Inc. has received generally stronger and more positive grades, including multiple Buy and Overweight ratings, whereas Figma, Inc. holds mostly Neutral and Equal Weight positions. This suggests Unity’s outlook is more optimistic, which could influence investor sentiment toward higher potential growth expectations.
Strengths and Weaknesses
Below is a comparison of key strengths and weaknesses between Unity Software Inc. (U) and Figma, Inc. (FIG) based on the most recent financial and operational data.
| Criterion | Unity Software Inc. (U) | Figma, Inc. (FIG) |
|---|---|---|
| Diversification | Moderate: Revenue split between Create Solutions (614M) and Operate Solutions (1.2B) | Limited: Focused primarily on design collaboration tools, less diversified |
| Profitability | Weak: Negative net margin (-36.6%) and declining ROIC (-12.8%) | Very weak: Significant losses with net margin at -97.7% and ROIC -59.7% |
| Innovation | Strong: Industry leader in real-time 3D development platforms | Strong: Pioneering collaborative design software with rapid adoption |
| Global presence | Broad: Serves global game developers and enterprises | Moderate: Growing presence but smaller global footprint |
| Market Share | Significant in gaming and simulation software markets | Growing in design software niche but smaller overall market share |
Key takeaways: Both companies face profitability challenges with negative margins and declining returns on invested capital, indicating value destruction. Unity benefits from better diversification and a stronger global footprint, while Figma excels in innovation within its niche. Investors should weigh Unity’s broader revenue base against Figma’s rapid growth potential but higher risk profile.
Risk Analysis
Below is a comparative table outlining key risks for Unity Software Inc. (U) and Figma, Inc. (FIG) as of 2024, based on their financials and market conditions:
| Metric | Unity Software Inc. (U) | Figma, Inc. (FIG) |
|---|---|---|
| Market Risk | High beta (2.05) indicates high volatility; stock range wide (15.33-52.15) | Negative beta (-3.80) with extreme volatility; range wide (29.48-142.92) |
| Debt Level | Moderate debt-to-equity (0.74), debt to assets 35% (neutral) | Very low debt-to-equity (0.02), debt to assets 1.6% (favorable) |
| Regulatory Risk | Moderate, technology sector subject to privacy and IP laws | Moderate, browser-based software with potential data security focus |
| Operational Risk | Negative net margin (-36.6%) and ROE (-20.8%) indicate operational losses | Very negative net margin (-97.7%) and ROE (-55.3%), high operational losses |
| Environmental Risk | Low, typical for software industry | Low, typical for software industry |
| Geopolitical Risk | Exposure to global markets including China and Europe | Global exposure but less diversified workforce and markets |
Synthesis: The most impactful risks for both companies are operational losses and market volatility. Unity faces high market risk with significant operational inefficiencies, while Figma’s extreme losses and unusual negative beta present elevated financial and market risks. Debt levels are manageable for both, but caution is warranted due to persistent unprofitability.
Which Stock to Choose?
Unity Software Inc. (U) shows a declining income with a 17.1% revenue drop in 2024, unfavorable profitability ratios including a -36.63% net margin, but maintains a solid current ratio of 2.5 and a slightly favorable PE ratio; its overall rating is very favorable despite value destruction indicated by a very unfavorable moat.
Figma, Inc. (FIG) reports higher revenue growth at 48.36% but suffers from very unfavorable profitability ratios, including a -97.74% net margin and a much higher price-to-book ratio of 39.1; it holds low debt levels and a favorable WACC, yet the global assessment remains unfavorable with a very unfavorable moat and a moderate overall rating.
Investors with a tolerance for volatility and a focus on growth might find Figma’s rapid revenue expansion appealing, while those seeking financial stability and moderate valuation metrics may view Unity’s profile as relatively more stable despite its challenges; both companies presently exhibit value destruction and should be considered cautiously.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of Unity Software Inc. and Figma, Inc. to enhance your investment decisions:
