David Larsen, an analyst from BTIG, maintained the Buy rating on Simulations Plus. The associated price target remains the same with $25.00.
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David Larsen has given his Buy rating due to a combination of factors including Simulations Plus’s recent financial performance and strategic positioning. The company reported better-than-expected revenue and adjusted EBITDA for the third quarter of fiscal year 2025, with revenue reaching $20.4 million and adjusted EBITDA increasing by 33% year-over-year. This performance exceeded both BTIG and consensus estimates, indicating strong operational execution despite prior challenges.
Additionally, Larsen notes the company’s potential for long-term growth, driven by the pharmaceutical industry’s shift from traditional testing methods to biosimulation and modeling, areas where Simulations Plus is well-positioned. Although the company faces significant near-term headwinds, such as industry-wide pricing reforms and macroeconomic challenges, the software segment showed resilience with new customer acquisitions and upsells. These factors, combined with cost-saving measures and a strategic focus on software growth, underpin Larsen’s optimistic outlook and Buy rating for the stock.