Shares of tech company Unity Software (NYSE: U) have been on a roller coaster the past year. The stock hit a 52-week high of $50.08 last July before sinking to a low of $22.20 in November. Then shares zoomed past $40 toward the end of 2023, only to drop to around $30 at the time of this writing.

These swings might make you wonder if its latest share price drop creates a buy opportunity. The answer is complicated because the company is undergoing substantial changes.

Unity’s revenue growth is taking a short-term hit, but its other financials are showing improvement. The company’s 2023 net loss of $826.3 million was a decline from 2022’s loss of $919.5 million, indicating progress toward profitability.

Unity exited 2023 with a solid balance sheet as well. Assets at the end of the fourth quarter totaled $7.2 billion compared to total liabilities of $3.8 billion. Cash and equivalents alone were $1.6 billion.

Despite the positives, investing in Unity now holds some risk since the results of Unity’s transformation efforts are a few quarters away. Also, Whitehurst won’t be the CEO for the long term, so there’s uncertainty about the company’s performance under a new CEO.

These factors mean that buying Unity stock now is not for the faint of heart. The past year’s roller coaster in Unity’s share price could continue in 2024, given the company’s transformation efforts.

However, investors interested in growth stocks may want to keep an eye on Unity. If the firm’s revenue growth accelerates later this year, as Visoso predicts, and its path toward profitability continues to improve, you may want to consider buying Unity stock in the future.