09:49 AM EDT, 05/17/2024 (MT Newswires) -- NICE's (NICE) solid Q1 performance was overshadowed by an unexpected chief executive transition, causing shares to drop 13% Thursday, RBC said in a note to clients late Thursday.

"To us, a CEO transition represents meaningful risk," the investment firm said.

NICE reported Q1 adjusted earnings Thursday of $2.58 per diluted share and revenue of $659.3 million, respectively, beating market expectations as compiled by Capital IQ of adjusted earnings of $2.45 per diluted share and revenue of $655.4 million.

Separately, the company said Chief Executive Barak Eilam plans to step down from his position, effective Dec. 31, adding that its board has started the search for a new CEO and would consider both internal and external candidates.

Eilam, during his decade-long term as CEO, led two major transformations, one focusing on margin expansion and divestments and a more significant shift to the cloud including the pivotal InContact acquisition in 2016, RBC's note said.

RBC lowered its price target on NICE stock to $265 from $285 on CEO transition risk and maintained an outperform rating.

NICE shares were up 0.1% in early Friday trading.

Price: 198.83, Change: +0.23, Percent Change: +0.12