Premarket trading on Wednesday saw shares of Unity Software (U), which fell more than 22% after it reported its Q1 results. It also offered no guidance.

Unity reported Q1 revenue at $320.1 million. This is less than the $321.7million consensus estimate. This quarter saw an 8c adjusted loss per share for Unity, as compared to the 10c loss per share reported in the prior year and 7.9c estimated loss per share.

Unity projects revenue of between $290 million and $295 million for Q2. This is well below the consensus estimate of 359.7 million. Analyst consensus was $1.49 trillion. The expected FY revenue range for Unity is $1.35 billion to 1.43 billion.

Unity noted “challenges with monetization products that we expect to impact 2022” and revenue outlook.

Daiwa Securities analyst Jonathan Kess downgraded U stock to Neutral from Outperform “due to near term uncertainty regarding their product fixes and rev deceleration.”

New price targets are $34.00 per Share, down from $110.00

“We are still a believer in U’s long-term market potential. We are just taking a more cautious approach near to medium term,” Kess said in a client note.

Morgan Stanley (NYSE:) analyst Matthew Cost reiterated an Overweight rating and lowered the PT to $50.00 per share, down from $110.00 to reflect lower multiple and “disappointing guidance.”

“Operate and Create results/guidance diverged strongly in 1Q as ad network challenges weigh on the outlook, despite engine strength,” Cost said in a client note while adding that he expects a 2H reacceleration.

By Senad Karaahmetovic