The clinical-stage biotech market continues to show encouraging signs of growth. One company that could be well-positioned to benefit from its strength is Simulations Plus (NASDAQ:SLP), a leading modeling and simulation software developer for the pharmaceutical and biotechnology industries. Fueled by a solid earnings report, the stock is up roughly 20% over the past 90 days and could offer investors an opportunity for both value and growth.
SLP’s Artificial Intelligence Simulation Technology
Simulations Plus offers research services to pharmaceutical and biotechnology companies. It is involved in developing modeling and simulation software that supports drug discovery, development research, and regulatory submissions.
As a pioneer in the development of predictive technology tools, the company has been at the forefront of incorporating advancements in AI technology to further improve its simulation solutions. SLP has also been able to leverage its long-standing partnerships and collaborations with industry leaders and regulatory agencies to access vast stores of data, which it uses to refine and tune its predictive algorithms.
Simulations Plus’ Recent Financial Results and Outlook
The company recently reported promising second quarter FY24 results, with revenues increasing 16% to $18.3 million. This increase was driven by an 11% increase in software revenue, which accounted for 63% of the total revenues. Earnings per share also beat expectations of $0.19, coming in at $0.20.
The quarter ended with $117.5 million in cash and investments on the balance sheet, which the company intends to use to pursue strategic acquisitions and partnerships. The company declared a cash dividend of $0.06 per share, payable on May 6, 2024, for shareholders of record as of April 29, 2024.
In its latest earning call, the company remains “cautiously optimistic” that it is on track to fulfill its guidance for FY 2024, with total revenues of $69 million and an expected growth of 10% to 15%, driving an EPS of $0.66 to $0.68.
What is the Price Target for SLP Stock?
The stock has been trending upwards, climbing 6.13% over the past year. It trades in the upper half of the 52-week price range of $32.64-$52.51 and continues to demonstrate positive price momentum, trading above the 20-day (42.38) and 50-day (41.43) moving averages.
Analysts covering the company have been bullish on the stock. Simulations Plus is rated a Moderate Buy based on the recommendations and 12-month price targets of two Wall Street analysts issued in the past three months.
The average price target for SLP stock is $53.00, which represents a 15.97% upside from current levels.
SLP in Summary
Simulations Plus continues gaining momentum, showing promising growth in the flourishing clinical-stage biotech market. The company’s recent success and solid financial footing lay a foundation for ongoing strategic growth. Given its continuing strong performance, the company could be a solid prospect for investors looking to tap into the thriving biotech market.
