Silk Road Medical (NASDAQ:SILK) shares were in free fall today, closing with a nearly 50% loss after the company was hit with three downgrades amid a whirlwind of disappointing news: Q3 preliminary revenue miss, reduced full-year guidance, and word of CEO Erica Rogers’ retirement.
Citi in particular downgraded the company by two notches, to Sell from Buy, and cut its price target to $8.00 from $35.00. The firm said that, despite their belief in the company's Transcarotid Artery Revascularization Procedure (TCAR) for coronary artery disease (CAD) care, the impending departure of the CEO and soft outlook are now significant concerns.
The analysts wrote, "There is little visibility into the business presently and we see limited room for stock appreciation and expect investors may capitulate after a difficult year for SILK."
Another Wall Street firm, B.Riley, slashed its rating from Buy to Neutral with a price target of $14.00 (from $54.00). The firm lowered its top-line estimates for 2023 and 2024 pending more visibility. Despite retaining the belief that CAS adoption will be limited, the CEO change and trimmed guidance insert an added layer of uncertainty and obscure the path toward share recovery in the absence of a clear catalyst. The potential catalysts that remain hinge on strong quarterly performance execution and the appointment of a new CEO, according to the analysts.
Meanwhile, Stifel downgraded Silk Road Medical from Buy to Hold with a price target of $12.00 (from $45.00) due to a number of fundamental uncertainties that have weighed on the stock throughout this year, and now with additional uncertainties added to the company's outlook, such as the revenue miss, guidance cut, CEO’s retirement, and “that retirement comes ahead of potential Jan 1, 2024 competitive uncertainties, assuming CMS affirms a preliminary carotid-artery-stenting (CAS) reimbursement decision. That decision could come any day now.”