LivaNova: Abrupt CEO Resignation Holds Few Surprises as Shares Rise

While the resignation of LivaNova CEO Damien McDonald was rather abrupt, it was not wholly surprising, from our perspective, and we’re leaving our fair value estimate unchanged. Shares rose 13% on this development and the firm’s indication that first-quarter results were better than expected. However, the stock still remains roughly 9% below our intrinsic value. The management changeover holds few implications for LivaNova’s narrow economic moat, which remains rooted in intangible assets as well as switching costs associated with its neuromodulation devices. The board is moving forward with the executive search, and board chair William Kozy will take on the CEO role in the interim.