Unity Software Inc (NYSE:U)’s CEO retirement announcement is likely a good start to rebuilding trust with customers and investors, but also adds uncertainty about future financial targets and possibly its overall growth strategy, according to Jefferies analysts.
In an update to clients, they reduced their target price on Unity Software stock by 2% to $29 per share, believing the company will likely not be able to meet its current financial targets.
"We generally view this management change favorably and sit anxiously wondering what direction the next management team will choose to go with on the core growth strategy," the analysts wrote.
CEO John Riccitiello has retired, effective immediately, amid the ongoing consumer reaction to the recently announced pricing structure changes and increases, while being replaced by former Red Hat (NYSE:RHT) CEO James Witehurst as the company initiates a search for a permanent CEO.
Unity reiterated its 3Q guidance of $540 million to $550 million in revenue along with adjusted EBITDA of $90 million to $100 million.
Shares of Unity Software edged 0.5% higher to $30.14 in late-afternoon trading on Wednesday and have gained 12% year to date.
Contact Sean at sean@proactiveinvestors.com