2023-04-21 09:17:45 ET
Everbridge ( NASDAQ: EVBG ) fell 10% in premarket trading after Florida terminated its contract with the company after a blunder on Wednesday sent an emergency alert to smartphones in the early morning, likely waking up millions of Floridians. Stephens downgraded the stock to equal-weight on the news.
"While this contract alone isn't terribly meaningful at ~$4m in ARR (1% of total), our concern from here is that this negative publicity creates risk of reputational damage that could spur additional public alerting customer losses," Stephens analyst Brian Colley, who cut his price target to $34 from $41, wrote in a note on Friday.
"We believe shares could remain range-bound until we get better visibility into the impact of the situation," Colley added.
Everbridge ( EVBG ) was informed by the Florida Division of Emergency Management on Thursday that the agency terminated its contract with the company one year earlier, effective June 30, according to an 8-K filing on Friday. The annual value of the contract amounts to $3.5 million.
“ We identified an unfortunate procedural human error in this monthly test that we are investigating," Everbridge said in the filing. "As mentioned by FDEM, we too regret the inconvenience this test caused the residents of Florida earlier this morning. We are committed to the State of Florida and to FDEM as a partner, as we are with all of our customers, to continue to improve and ensure best practices are applied.”
Bloomberg reported in late August that Everbridge, which focuses on public-warning software and technology, was exploring "strategic options" that could include a sale.
For further details see:
Everbridge drops following Florida contract loss after emergency alert blunder woke up Floridians