NEW YORK - Rubric Capital Management LP, an investment advisor with a 9.0% ownership stake in Xperi (NASDAQ:ADEA) Inc. (NYSE: XPER), has voiced its disappointment following the preliminary outcomes of Xperi's 2024 Annual Meeting of Stockholders. Rubric's letter to fellow shareholders highlighted that slightly over 50% of shares voted in favor of the contested board nominees, indicating a lack of strong stockholder support for the current board of directors.
Despite the dissatisfaction, Rubric acknowledged the board and management's response to their active engagement by committing to several changes. These include initiating a strategic alternatives process for its subsidiary Perceive, expected to conclude by the end of summer 2024, with any proceeds potentially returned to shareholders. Xperi is also set to expand its board with new directors in 2024 and eliminate certain stockholder-unfriendly provisions, such as supermajority voting requirements.
Furthermore, Xperi's board has made promises regarding the company's financial performance, aiming for 2024 revenues between $500-$530 million and EBITDA margins of 12-14%. They have also reaffirmed their 3-5 year financial guidance, which projects a revenue CAGR from 2022 of 12-15% and adjusted EBITDA margins of 25-30%. Additionally, the company has indicated it will execute a stock repurchase plan when deemed appropriate, considering the stock's decline of about 19% year-to-date and current trading near all-time low prices.
InvestingPro Insights
As Xperi Corporation (NYSE: XPER) navigates through a challenging period marked by shareholder unrest and strategic reassessments, the company's financial metrics and analyst projections offer a glimpse into its current standing. According to real-time data from InvestingPro, Xperi has a market capitalization of $413.56 million. Despite recent stock price volatility, the company boasts a robust gross profit margin of 76.51% over the last twelve months as of Q1 2024, underscoring its ability to maintain profitability on its core operations.
In light of the active engagement with Rubric Capital Management and the promise of strategic changes, it's noteworthy that analysts predict Xperi will be profitable this year. This aligns with the company's own financial performance targets for 2024. Furthermore, Xperi's liquid assets surpass its short-term obligations, which could provide financial flexibility in executing its strategic alternatives process and potentially returning proceeds to shareholders.
For investors seeking a deeper dive into Xperi's financial health and future prospects, additional InvestingPro Tips are available, including an analysis of the company's debt levels and profitability over the last twelve months. With the use of coupon code PRONEWS24, readers can gain an extra 10% off a yearly or biyearly Pro and Pro+ subscription to InvestingPro, where they can access a total of 6 InvestingPro Tips tailored for Xperi. These tips can provide valuable insights as shareholders monitor the company's adherence to its financial and operational commitments.
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