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Silk Road (NASDAQ:SILK) Plummets as Preliminary Q3 Revenues Disappoint
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Silk Road (NASDAQ:SILK) Plummets as Preliminary Q3 Revenues Disappoint

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Silk Road Medical plummeted in pre-market trading after disappointing preliminary Q3 revenues and CEO exit.

Silk Road Medical (NASDAQ:SILK), a medical device company, crashed in pre-market trading after the company announced preliminary Q3 revenues of $44.4 million, up by 19% year-over-year. However, this was below analysts’ expectations of $46.3 million.

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The company’s forecast for FY23 also left analysts and investors disappointed. Silk Road Medical has projected revenues in the range of $170 million to $174 million, which represents a year-over-year growth between 23% and 26% lower than its prior forecast of $180 million to $184 million. This missed Street estimates of $182 million.

Moreover, the company’s CEO, Erica Rogers, who has been at the helm for the past 11 years, announced her resignation.

Is SILK Stock a Buy?

Following the announcement, top-rated Citi analyst Joanne Wuensch downgraded the stock to a Sell from a Buy. The analyst also slashed the price target to $8 from $35, implying a downside potential of 42.8% from current levels. Wuensch’s price target is the lowest on the Street.

The analyst commented, “…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.”

Analysts are sidelined about Silk Road Medical with a Hold consensus rating based on one Buy, four Holds, and three Sells. The analysts have an average Silk Road Medical price target of $18.43, implying 31.7% upside potential.

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