We share weekly commentaries with investors on stocks in our strategies that have appreciated or dropped more than 15% in a day during the course of the week. We hope you find this commentary useful.
|Unity Software (U)|
|-16%||Shares of Unity Software traded down nearly 16% on Thursday after the company's fourth quarter report. Including recently acquired ironSource, revenue growth was 43% year-over-year and, according to management, will accelerate to 48% in the first quarter and 53% for the year, both growth rates lower than consensus expectations. Management explained that the assumptions behind those forecasts are conservative, including no recovery in the mobile gaming market even though it seems to have stabilized. Meanwhile, strong execution has increased non-gaming to 30% of Create revenue. Our conviction remains high that Unity will maintain leadership as the 2D and 3D asset engine and monetization platform of choice for developers across many verticals. Unity provides collaborative software to develop real-time 2D and 3D assets for applications in simulations, digital twins, game development, and AR/VR.|
|-17%||Shares of Personalis traded down ~17% on Friday after the company issued lower-than-expected 2023 revenue guidance. To extend its cash runway, Personalis has pruned low-margin customer accounts, closed its laboratory in China, and will focus on minimal residual disease (MRD) testing in indications like breast cancer, lung cancer, and immunotherapy monitoring. Thanks to its proprietary biochemistry, machine learning models, and mass-spectrometry platform, Personalis has built what we believe is the most sensitive technology for MRD assessment and immunotherapy response prediction.|
|Kratos Defense & Security Solutions (KTOS)|
|+16%||Shares of Kratos Defense & Security Solutions traded up ~16% on Friday after the company reported higher-than-expected fourth-quarter revenue and earnings and announced a new contract with the U.S. Navy to procure 55 aircraft, mission kits, flight consumables, and technical data. Initial contract value is ~$50 million, $227.6 million possible if certain options are exercised at the maximum production quantities. Kratos supplies high-powered jet drones to the military.|