William Blair analyst Max Smock has reiterated their bullish stance on SLP stock, giving a Buy rating yesterday.
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Max Smock has given his Buy rating due to a combination of factors that he believes outweigh the near-term softness in software results. He notes that Simulations Plus modestly exceeded revenue expectations for the fiscal first quarter of 2026, primarily because its services business performed much better than anticipated, even though software sales came in below forecasts. While profitability metrics such as adjusted EBITDA and adjusted EPS missed both his and the Street’s estimates, management’s decision to reaffirm full-year 2026 guidance for revenue, margins, and earnings supports his view that the underlying outlook remains intact.
Smock also emphasizes that the stock’s after-hours decline appears driven by investor concern over weak software revenue in what is historically a seasonally softer quarter, rather than a deterioration in fundamentals. He highlights improving software renewal trends, with a higher renewal rate quarter-over-quarter, and points to expected pricing benefits fueled by recent product upgrades, including AI-related enhancements, as key drivers for a reacceleration in software growth over the balance of the year. Additionally, he underscores the strength of services demand and bookings, especially from large pharmaceutical clients, as evidence of healthy end-market momentum. Taken together, these dynamics underpin his conviction that the company is well positioned to meet its guidance and deliver attractive upside, supporting his Buy recommendation on the shares.
In another report released yesterday, Craig-Hallum also maintained a Buy rating on the stock with a $0.00 price target.