This paper analyzes the performance of spectro-temporal unitary transforms for coherent optical modulation. Unlike conventional IQ modulation, such transforms are based on a cascade of phase modulators and dispersive elements, so are theoretically lossless and not limited by the bandwidth of the constituent modulators. We analyse the performance limits and design trade-offs of this scheme: estimating how the number of stages, amount of dispersion, modulator bandwidth, symbol block length and electrical signal power impacts the achievable signal-to-distortion ratio (SDR). Importantly, we show that high (>30 dB) SDRs suitable for modern >200 GBd class coherent optical communications are achievable with a low (<6) number of stages and reasonable parameters for driver power, modulator bandwidth and on-chip dispersion. Finally we address the SDR penalties associated with potential phase, amplitude, or dispersion errors, and limited DAC resolution.