Altus Group Ltd. AIF-T stock tumbled Friday after the commercial real estate data provider announced the abrupt departure of chief executive officer Jim Hannon, said it was abandoning a sale process and cut its financial guidance for the year for the second straight quarter.
The Toronto company’s share price dropped by as much as 18.3 per cent in heavy trading following the aftermarket announcement Thursday, which coincided with its release of third-quarter earnings. The stock closed at $47.18, down 12 per cent on the day.
Given the spate of news “we think it’s reasonable to take a pause until we gain more clarity on the outlook for 2026,” said National Bank Capital Markets analyst Richard Tse, who slashed his target price on the stock to $52 from $74.
Altus said Mr. Hannon, who became CEO in April, 2022, after serving as president of Altus’s analytics division, was also leaving the board, and would be replaced by his predecessor Mike Gordon. Mr. Gordon is also becoming executive chair, replacing Raymond Mikulich, who remains on the board.
Mr. Gordon in a release thanked Mr. Hannon for “his vision, dedication, and tireless efforts over the years” and for overseeing Altus’s transition to become a purely data and analytics provider.
Mr. Gordon and Mr. Mikulich said his exit was tied to Altus’s completion of its transformation and shift to step up growth efforts. “With that transition largely completed, I believe it is time for new leadership and I am confident and fully supportive of Mike Gordon, a highly regarded data and analytics executive with a proven track record of value creation,” Mr. Mikulich said.
But news of his sudden departure also came as the company cut its outlook and said it had ended a strategic review process. The company, which had a market capitalization of more than $2-billion prior to Friday, acknowledged in August it was in the midst of a process after Reuters reported it was exploring a sale.
Real estate software provider Altus Group explores sale after receiving acquisition interest
Altus stated Thursday that after receiving multiple proposals, the board determined that staying independent and accelerating its strategy was its best option for maximizing shareholder value. It further said the company believed it could take advantage of its refreshed products and stronger market conditions, which “present considerable upside potential.”
“The strategic review gave us tremendous insight and reinforced confidence in our value creation plan,” Mr. Gordon stated. “We came away with clear priorities and strengthened conviction on what needs to be done and how we need to execute to accelerate our momentum.”
Altus also reported Thursday that it generated $133-million in third-quarter revenue and operating earnings of $26-million, in line with analyst expectations. However, Altus cut its revenue-growth forecast for 2025 to between 0 per cent and 2 per cent after lowering expectations in August to a gain of 2 per cent to 4 per cent. Its earlier target was 3-per-cent to 5-per-cent growth. Altus also forecast it would expand its operating profit margin by 3.5 to 4.5 percentage points this year, down from an August prediction of four to five percentage points.
RBC Dominion Securities analyst Paul Treiber said in a note that Altus might now consider share buybacks or divestitures of non-core assets. He added investors would seek additional disclosures and insights into Altus’s strategy when it hosts an investor day on Nov. 20.