Unity SoftwareFRA:US3 +5.34%65 Gross Margin % is 30.81% as of Mar. 2026, which is 59% below its 10-year median of 75.67. GuruFocus rates FRA:US3 with a GF Score™ of 65/100 and a GF Value™ of €22.04 (Modestly Overvalued). The stock has 3 warning signs investors should review. Among 2,681 Software companies, Unity Software ranks better than 72.81% on this metric.
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Unity Software had a gross margin of 30.81% for the quarter that ended in Mar. 2026 => Competition eroding margins
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Unity Software Gross Margin % Related Terms
Unity Software Gross Margin % Historical Data
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The historical data trend for Unity Software's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
FRA:US3 vs FIG, GWRE, TYL: Gross Margin % Comparison
For the Software - Application subindustry, Unity Software's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Unity Software Gross Margin % vs Software Industry
For the Software industry and Technology sector, Unity Software's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Unity Software's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Unity Software (FRA:US3) has a Gross Margin % of 30.81% as of Mar. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on Unity Software and its competitors. This is 59% below median its historical median of 75.67. Over the past decade, Unity Software's Gross Margin % has ranged from 62.80 to 78.66. According to the industry distribution chart, Unity Software ranks #729 out of 2681 companies in the Software industry, placing it in the top 27.2%.
Is Unity Software's Gross Margin % too high?
Unity Software's current Gross Margin % of 30.81% is 59% below median its 10-year median of 75.67. Over the past 10 years, this metric has ranged from a low of 62.80 to a high of 78.66. The Software industry median Gross Margin % is 40.45. Unity Software's value of 30.81% is 23.8% below this industry median. Based on the distribution chart, Unity Software ranks #729 out of 2681 companies in the Software industry, which is above the industry midpoint. Overall, Unity Software has a GF Score™ of 65/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Unity Software's Gross Margin % compare to FIG and GWRE?
According to the Software industry distribution chart, Unity Software ranks #729 out of 2681 companies for Gross Margin %. This puts Unity Software in the upper half of its industry. The industry median Gross Margin % is 40.45. Unity Software's value of 30.81% is 23.8% below this benchmark. Historically, Unity Software's own Gross Margin % has ranged from 62.80 to 78.66 over the past decade. While the company's 10-year median is 75.67 vs. the industry median of 40.45, Unity Software has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for a Software company?
The median Gross Margin % among Software companies is 40.45, based on 2,681 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Unity Software's current Gross Margin % of 30.81% is 23.8% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on Unity Software and its competitors. For the Software industry, the median Gross Margin % is 40.45 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Unity Software's current Gross Margin % is 30.81%, which is 59% below median its own 10-year median of 75.67. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Unity Software stock overvalued right now?
Based on GuruFocus' analysis, Unity Software (FRA:US3) is currently considered Modestly Overvalued. The stock's GF Value™ is €22.04, compared to a current price of €24.76 — trading 12.3% above its estimated fair value. The current Gross Margin % is 30.81%, which is 59% below median its 10-year median of 75.67 and 23.8% below the Software industry median of 40.45. Unity Software's overall GF Score™ is 65/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For Unity Software (FRA:US3), the current Gross Margin % is 30.81% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Unity Software (FRA:US3) Overvalued in 2026?
Based on GuruFocus' analysis, Unity Software stock appears to be overvalued.
The current stock price of €24.76 is trading 12.3% above its estimated GF Value™ of €22.04.
GuruFocus considers Unity Software to be Modestly Overvalued.
Key valuation signals for FRA:US3:
Gross Margin %: 30.81% (59% below median its 10-year median of 75.67)
GF Value™: €22.04 vs. price of €24.76 (12.3% above fair value)
Industry Position: 23.8% below the Software median (#729 of 2681)
No single metric tells the full story. See the FRA:US3 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Unity Software Inc provides a software platform for creating and operating interactive, real-time 3D content. The platform can be used 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 business is spread across the United States, Greater China, EMEA, APAC, and other Americas, and key revenue is derived from the EMEA region. Its products are used in the gaming industry, retail, automotive, architecture, engineering, and construction.
65GF Score
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