BofA Downgrades Everbridge On CEO Transition, Disappointing Guidance

Everbridge Inc’s EVBG 2022 revenue growth guidance of 20% to 23% is not only short of the consensus estimate of +26%, but also marks a sharp deceleration from 2021 levels, according to BofA Securities.

The Everbridge Analyst: Koji Ikeda downgraded the rating for Everbridge from Neutral to Underperform, while lowering the price target from $175 to $100.

The Everbridge Thesis: The company announced the resignation of CEO David Meredith, with CFO Patrick Brickley and CRO Vernon Irvin acting as co-CEOs while the CEO search is conducted, Ikeda said in the downgrade note.

The announcement is both “abrupt and unexpected, particularly given the business is still working through the large and transformative acquisition of xMatters from earlier this year and the relatively good results in 2021 thus far,” the analyst wrote.

The transition “creates an overhang until a permanent CEO is announced and also puts into question the overall future direction of the business,” he added.

The guidance is concerning and “feeds the bear thesis that the business could struggle to display 25% organic revenue/billings growth once acquisition revenue anniversaries out of the model,” Ikeda further mentioned.

EVBG Price Action: Shares of Everbridge had declined by 46% to $62.30 at the time of publication Friday.

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