Silk Road Medical (ticker: SILK) experienced a sharp decline in its stock price in premarket trading on Wednesday, following an analyst team’s downgrade and a retirement announcement from its CEO. Citi analysts, led by Joanne Wuensch, downgraded Silk Road to Sell from Buy and reduced the price target from $35 to $8. In addition, they lowered their earnings and revenue estimates.
As a result of these developments, the company’s shares dropped 37% to $8.79 in premarket trading. The retirement announcement came on Tuesday, stating that the company’s CEO, Erica Rogers, will retire after the completion of a succession process. However, she will continue to fulfill her roles as president and CEO until a successor is appointed.
Furthermore, Silk Road revealed preliminary third-quarter revenue figures that fell short of Wall Street’s expectations. The company also revised its full-year revenue guidance from a previous range of $180 million to $184 million to a new range of $170 million to $174 million.
Citi analysts noted that there is still a market demand for Silk Road’s products. However, with the departure of the CEO and the updated guidance, there is currently limited visibility into the business. Consequently, they believe there is little room for stock appreciation and expect investors to potentially lose confidence after a challenging year for SILK.