In the fast-evolving technology sector, Snowflake Inc. and Unity Software Inc. stand out as pioneers shaping the future of digital innovation. Snowflake excels in cloud-based data platforms, enabling businesses to harness data for strategic insights. Unity leads in interactive real-time 3D content creation, powering immersive experiences across devices. This article compares both firms to help you identify which presents a more compelling investment opportunity in 2026. Let’s dive in.
Table of contents
Companies Overview
I will begin the comparison between Snowflake Inc. and Unity Software Inc. by providing an overview of these two companies and their main differences.
Snowflake Inc. Overview
Snowflake Inc. provides a cloud-based data platform aimed at consolidating data into a single source of truth. Its Data Cloud platform supports businesses in generating insights, building data-driven applications, and sharing data across industries. The company, incorporated in 2012 and based in Bozeman, Montana, operates globally and holds a market cap of approximately 70.4B USD.
Unity Software Inc. Overview
Unity Software Inc. develops an interactive real-time 3D content platform for creating, running, and monetizing 2D and 3D content across devices such as mobile phones, consoles, and AR/VR gadgets. Founded in 2004 and headquartered in San Francisco, California, Unity serves a wide range of content creators and developers worldwide, with a market cap near 17.5B USD.
Key similarities and differences
Both companies operate in the technology sector focusing on software applications but serve distinct markets: Snowflake targets data management and analytics, while Unity focuses on interactive content creation. Snowflake’s business centers on cloud data platforms, whereas Unity’s platform caters to real-time 3D content development. Market capitalization and employee count also differ significantly, reflecting their diverse scales and market focus.
Income Statement Comparison
The following table compares the most recent fiscal year income statement metrics of Snowflake Inc. and Unity Software Inc., providing a snapshot of their financial performance.
| Metric | Snowflake Inc. (SNOW) | Unity Software Inc. (U) |
|---|---|---|
| Market Cap | 70.4B | 17.5B |
| Revenue | 3.63B | 1.81B |
| EBITDA | -1.10B | -235M |
| EBIT | -1.28B | -644M |
| Net Income | -1.29B | -664M |
| EPS | -3.86 | -1.68 |
| Fiscal Year | 2025 | 2024 |
Income Statement Interpretations
Snowflake Inc.
Snowflake’s revenue has grown strongly from $592M in 2021 to $3.63B in 2025, a 512.5% increase over the period. Despite the revenue surge, net income remained negative and worsened, reaching -$1.29B in 2025. The gross margin is healthy at 66.5%, but EBIT and net margins remain deeply negative, indicating ongoing profitability challenges. The latest year saw revenue growth slow to 29.2%, while net margin deteriorated.
Unity Software Inc.
Unity’s revenue increased from $772M in 2020 to $1.81B in 2024, up 134.7%, but net income stayed negative, totaling -$664M in 2024. The company maintains a solid gross margin of 73.5%, yet EBIT and net margins are negative, showing persistent losses. In 2024, revenue declined by 17.1%, though EBIT improved by 16.8%, signaling some operational progress despite top-line pressure.
Which one has the stronger fundamentals?
Snowflake demonstrates stronger top-line growth and favorable gross margin trends, yet struggles with worsening profitability and negative net margins. Unity shows less revenue growth and a recent revenue decline, but EBIT improved last year. Snowflake’s fundamentals appear more growth-oriented but with higher losses, while Unity faces slower growth with marginal operational gains, resulting in a mixed fundamental outlook for both.
Financial Ratios Comparison
The table below presents a side-by-side comparison of key financial ratios for Snowflake Inc. and Unity Software Inc., based on their most recent fiscal year data, to facilitate an objective financial analysis.
| Ratios | Snowflake Inc. (2025) | Unity Software Inc. (2024) |
|---|---|---|
| ROE | -42.9% | -20.8% |
| ROIC | -25.2% | -12.8% |
| P/E | -47.0 | -13.4 |
| P/B | 20.1 | 2.79 |
| Current Ratio | 1.75 | 2.50 |
| Quick Ratio | 1.75 | 2.50 |
| D/E | 0.90 | 0.74 |
| Debt-to-Assets | 29.7% | 34.9% |
| Interest Coverage | -528 | -32.1 |
| Asset Turnover | 0.40 | 0.27 |
| Fixed Asset Turnover | 5.53 | 18.3 |
| Payout ratio | 0 | 0 |
| Dividend yield | 0 | 0 |
Interpretation of the Ratios
Snowflake Inc.
Snowflake shows a mix of favorable and unfavorable ratios, with strong liquidity indicated by a current and quick ratio of 1.75, but suffers from weak profitability and efficiency metrics such as negative ROE (-42.86%) and a low asset turnover (0.4). The company does not pay dividends, reflecting a reinvestment strategy during its growth phase with no payout risks.
Unity Software Inc.
Unity displays solid liquidity with a current and quick ratio of 2.5 but faces challenges in profitability, evidenced by negative net margin (-36.63%) and ROE (-20.81%). Asset turnover is weak at 0.27, though fixed asset turnover is robust at 18.35. Unity also does not pay dividends, likely prioritizing reinvestment and R&D to support expansion.
Which one has the best ratios?
Both companies share a slightly unfavorable overall ratios profile, each with 50% unfavorable metrics. Snowflake benefits from stronger liquidity and fixed asset turnover, while Unity has higher liquidity but weaker profitability and a higher WACC. Neither company currently offers dividends, emphasizing growth over shareholder returns at this stage.
Strategic Positioning
This section compares the strategic positioning of Snowflake Inc. and Unity Software Inc., focusing on market position, key segments, and exposure to technological disruption:
Snowflake Inc.
- Leading cloud-based data platform with global reach amid competition in software application sector.
- Revenue driven by Data Cloud platform products and professional services supporting data consolidation and insights.
- Positioned in cloud data platform market; technological changes impact data integration and analytics capabilities.
Unity Software Inc.
- Interactive real-time 3D content platform serving diverse global markets with high competitive pressure.
- Key segments include Create and Operate Solutions for real-time 2D/3D content creation and monetization.
- Faces disruption risk from evolving 3D content creation technologies and expanding AR/VR device markets.
Snowflake Inc. vs Unity Software Inc. Positioning
Snowflake pursues a concentrated strategy focused on cloud data platforms, emphasizing data consolidation and analytics. Unity adopts a diversified approach, addressing multiple content creation and operation segments with broad platform solutions. Each approach entails distinct market and technological challenges.
Which has the best competitive advantage?
Both companies have a very unfavorable MOAT status, with declining ROIC and value destruction, indicating neither currently holds a strong competitive advantage based on capital efficiency and profitability trends.
Stock Comparison
The stock prices of Snowflake Inc. and Unity Software Inc. have shown contrasting movements over the past year, with Snowflake experiencing a notable decline and Unity demonstrating significant growth and accelerating momentum.
Trend Analysis
Snowflake Inc. posted a bearish trend over the past 12 months with a price drop of -8.27%. The trend showed deceleration, ranging from a high of 274.88 to a low of 108.56, alongside high volatility (42.6 std deviation).
Unity Software Inc. exhibited a bullish trend with a 31.0% price increase over the same period. The stock showed acceleration in its upward movement, with lower volatility (9.04 std deviation) and a price range between 15.32 and 46.42.
Comparing the two, Unity Software Inc. delivered the highest market performance with a strong bullish trend, while Snowflake Inc. faced a sustained bearish trend and deceleration.
Target Prices
The current analyst consensus indicates promising upside potential for both Snowflake Inc. and Unity Software Inc.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Snowflake Inc. | 325 | 237 | 281.86 |
| Unity Software Inc. | 60 | 39 | 50.98 |
Analysts expect Snowflake’s stock to trade well above its current price of $210.38, signaling optimism, while Unity’s consensus target is also above its current $40.95, indicating potential growth.
Analyst Opinions Comparison
This section compares analysts’ ratings and grades for Snowflake Inc. and Unity Software Inc.:
Rating Comparison
Snowflake Inc. Rating
- Rating: C-, considered very favorable by analysts.
- Discounted Cash Flow Score: Moderate at 3 out of 5.
- ROE Score: Very unfavorable, scored 1 out of 5.
- ROA Score: Very unfavorable, scored 1 out of 5.
- Debt To Equity Score: Very unfavorable, scored 1 out of 5.
- Overall Score: Very unfavorable, scored 1 out of 5.
Unity Software Inc. Rating
- Rating: D+, also considered very favorable by analysts.
- Discounted Cash Flow Score: Very unfavorable at 1 out of 5.
- ROE Score: Very unfavorable, scored 1 out of 5.
- ROA Score: Very unfavorable, scored 1 out of 5.
- Debt To Equity Score: Very unfavorable, scored 1 out of 5.
- Overall Score: Very unfavorable, scored 1 out of 5.
Which one is the best rated?
Snowflake Inc. holds a slightly better rating (C-) than Unity Software Inc. (D+), supported by a notably higher discounted cash flow score. However, both companies share equally low marks on key financial metrics and overall scores.
Scores Comparison
Here is a comparison of the Altman Z-Score and Piotroski Score for Snowflake Inc. and Unity Software Inc.:
Snowflake Inc. Scores
- Altman Z-Score: 5.36, in the safe zone, low risk
- Piotroski Score: 4, indicating average financial strength
Unity Software Inc. Scores
- Altman Z-Score: 2.93, in the grey zone, moderate risk
- Piotroski Score: 4, indicating average financial strength
Which company has the best scores?
Snowflake has a higher Altman Z-Score, placing it in the safe zone, while Unity is in the grey zone. Both companies share the same average Piotroski Score of 4.
Grades Comparison
Here is a comparison of the latest reliable grades assigned to Snowflake Inc. and Unity Software Inc.:
Snowflake Inc. Grades
This table summarizes recent grades from reputable financial institutions for Snowflake Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Barclays | Downgrade | Equal Weight | 2026-01-12 |
| Argus Research | Upgrade | Buy | 2026-01-08 |
| Citigroup | Maintain | Buy | 2025-12-08 |
| Wells Fargo | Maintain | Overweight | 2025-12-04 |
| Keybanc | Maintain | Overweight | 2025-12-04 |
| Piper Sandler | Maintain | Overweight | 2025-12-04 |
| Morgan Stanley | Maintain | Overweight | 2025-12-04 |
| Wedbush | Maintain | Outperform | 2025-12-04 |
| Deutsche Bank | Maintain | Buy | 2025-12-04 |
| Cantor Fitzgerald | Maintain | Overweight | 2025-12-04 |
Snowflake’s grades mainly show a stable overweight to buy consensus, with only one recent downgrade to equal weight.
Unity Software Inc. Grades
Below are recent grades from credible sources 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’s ratings reveal a positive trend with several recent upgrades to overweight and buy, reflecting growing analyst confidence.
Which company has the best grades?
Both companies hold a consensus “Buy” rating, yet Unity Software shows a more recent and consistent upgrade pattern compared to Snowflake’s mostly stable overweight stance with one downgrade. This suggests a potentially more bullish analyst outlook on Unity, which could influence investor sentiment and portfolio allocation decisions.
Strengths and Weaknesses
Below is a comparison of key strengths and weaknesses of Snowflake Inc. (SNOW) and Unity Software Inc. (U) based on the most recent financial and operational data.
| Criterion | Snowflake Inc. (SNOW) | Unity Software Inc. (U) |
|---|---|---|
| Diversification | Revenue mainly from product sales (3.46B in 2025) with limited service revenue (164M), moderate diversification. | Balanced revenue streams with Create Solutions (614M) and Operate Solutions (1.2B), showing good segment diversification. |
| Profitability | Negative net margin (-35.45%), ROIC (-25.24%), and ROE (-42.86%), indicating value destruction and unprofitable operations. | Also unprofitable with net margin (-36.63%), ROIC (-12.78%), and ROE (-20.81%), but slightly better than SNOW. |
| Innovation | Strong product growth from 553M (2021) to 3.46B (2025) reflects high innovation capacity and market adoption. | Innovation reflected in expanding Operate Solutions, growing from 471M (2020) to 1.2B (2024), showing product evolution. |
| Global presence | Global scale implied but with challenges in profitability and operational efficiency. | Global presence supported by diversified revenue sources and higher current ratio (2.5), indicating good liquidity. |
| Market Share | Market share growth in cloud data products but facing profitability and capital efficiency issues. | Growing market share in gaming and real-time 3D solutions with strong asset turnover (18.35), reflecting efficient use of assets. |
Key takeaways: Both companies demonstrate strong innovation and growing revenues but are currently unprofitable with negative returns on invested capital. Unity shows better liquidity and asset efficiency, while Snowflake struggles more with profitability and value creation. Caution is advised due to ongoing value destruction risks.
Risk Analysis
Below is a comparative table outlining key risk factors for Snowflake Inc. (SNOW) and Unity Software Inc. (U) based on the most recent available data:
| Metric | Snowflake Inc. (SNOW) | Unity Software Inc. (U) |
|---|---|---|
| Market Risk | Beta 1.14, moderate volatility | Beta 2.05, high volatility |
| Debt level | Debt-to-Equity 0.9, moderate risk | Debt-to-Equity 0.74, moderate risk |
| Regulatory Risk | Moderate, US and international data laws | Moderate, global software compliance |
| Operational Risk | Platform dependency, ongoing losses | Heavy R&D costs, negative margins |
| Environmental Risk | Low, primarily software company | Low, primarily software company |
| Geopolitical Risk | Moderate, global customer base | Moderate, global customer base |
Snowflake faces moderate market and operational risks linked to ongoing losses and platform reliance, but benefits from a stable debt level and a safe Altman Z-Score indicating low bankruptcy risk. Unity exhibits higher market volatility and moderate financial strain, reflected in a “grey zone” Altman Z-Score and negative profitability, marking operational and market risks as most impactful. Investors should weigh these risks carefully against growth prospects.
Which Stock to Choose?
Snowflake Inc. (SNOW) shows strong revenue growth of 29.21% in 2025 and a favorable gross margin of 66.5%, but profitability remains negative with a net margin of -35.45%. Financial ratios are slightly unfavorable overall, with some strengths in liquidity and asset turnover. Debt levels are moderate, and the company’s rating is very favorable, though the ROIC trend indicates value destruction.
Unity Software Inc. (U) experienced a revenue decline of -17.1% in 2024 and an unfavorable net margin of -36.63%. Financial ratios are also slightly unfavorable, with decent liquidity but weaker profitability and a neutral debt profile. The rating is very favorable despite negative ROIC trends, signaling ongoing value erosion and operational challenges.
For investors, Snowflake’s stronger revenue growth and favorable rating might appeal to growth-focused profiles, while Unity’s recent stock price appreciation and accelerating trend could be more attractive to risk-tolerant investors seeking momentum. Both companies exhibit value destruction with declining ROIC, suggesting caution depending on risk tolerance and investment strategy.
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 Snowflake Inc. and Unity Software Inc. to enhance your investment decisions:
