Credit Suisse Downgrades Textura Amid Executive Departures

• Shares of Textura Corp TXTR have declined 10.54 percent year to date, reaching a low of $23.44 on November 17.
• Michael Nemeroff of Credit Suisse has downgraded the rating on the company from Outperform to Neutral, while lowering the price target from $27 to $24.
• The downgrade follows the announcement that Patrick Allin had resigned from his position as Executive Chairman as well as from the company’s board.

Analyst Michael Nemeroff believes that the departure of the co-founder and former CEO of Textura would increase near term sales execution risk, “as he was a key relationship manager for many of the company's large general contractor and owner customers.”

Nemeroff also believes that Mr. Allin’s departure might also affect the company’s near term ability to build its sales pipeline and convert prospective customers who are in the “sales funnel” at present.

Despite our belief that TXTR's product portfolio provides significant value to customers throughout the commercial construction industry, and that the company's financial model is compelling and will show significant leverage at scale,” Nemeroff believes that the risk/reward is currently fairly balanced.

The revenue growth and EPS estimates for 2016 have been lowered from 32.5 percent year on year to 30.1 percent year on year and from $0.58 to $0.50, respectively.