Analysts Downgrade Heart Devices Focused Silk Road Medical, Cite Uncertain Prospects

Tuesday, Silk Road Medical Inc SILK reported interim preliminary Q3 revenue expectation of approximately $44.4 million, up 19% Y/Y, lower than the consensus of $46.29 million.

Silk Road Medical projects FY23 revenue of $170 million-$174 million, up 23%-26% Y/Y, well below the consensus of $181.66 million and prior guidance of $180 million-$184 million.

Silk Road Medical also announced that CEO Erica Rogers plans to retire from the company after completing a succession process. Ms. Rogers will remain president and CEO of the company until her successor is appointed.

Citi downgraded the stock from Buy to Sell, with a price target of $8 from $35. 

There is still a need for Silk Road's products, Citi analysts acknowledged, but "with the departure of the CEO and guidance update, 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."

Piper Sandler lowered the price target from $25 to $11 with a Neutral rating. The analysts Adam Maede and Simran Kaur expect Street forecasts to move sizably lower, primarily reflecting dampened Q4 commercial implications. 

Although Piper anticipates some challenges ahead for SILK, the analysts consider the current valuation, following tomorrow's expected developments, to be reasonably fitting.

Stifel has downgraded Silk Road Medical from Buy rating to Hold with a price target of $12, down from 45 given the number of fundamental uncertainties that have weighed on the stock throughout 2023, and now with additional uncertainties.

Ongoing TCAR clinical data consistently indicates that the procedure provides comparable if not superior, safety and efficacy outcomes compared to competing CEA and CAS procedures. 

Stifel says the research consistently underscores that TCAR presents an efficient, rapid, secure, and reproducible minimally-invasive solution for carotid treatment.

Price Action: SILK shares are down 48.50% at $7.21 on the last check Wednesday.