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Simulations Plus (SLP)
:SLP
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Simulations Plus
(NASDAQ:SLP)
63Neutral
Positive Factors
Revenue Growth
Simulations Plus reported strong revenue growth with a 31% year-over-year increase, showcasing robust financial performance.
Software Segment Performance
The software segment experienced a major recovery, surging 41% year-over-year, with Monolix showing a standout 43% increase.
Negative Factors
Macro Challenges
The macro backdrop is negatively impacted by funding challenges and customer cost constraints.
Service Revenue Decline
Service revenue declined 9% year-over-year on an organic basis due to client-driven data delays.
Simulations Plus (SLP) vs. S&P 500 (SPY)
Market Cap
$478.50M
Dividend Yield1.01%
Average Volume (3M)190.58K
Price to Earnings (P/E)67.0
Beta (1Y)0.91
Revenue Growth19.84%
EPS Growth-22.84%
CountryUS
Employees243
SectorHealthcare
Sector Strength79
IndustryMedical - Healthcare Information Services
Share Statistics
EPS (TTM)0.36
Shares Outstanding20,092,436
10 Day Avg. Volume256,107
30 Day Avg. Volume190,583
Financial Highlights & Ratios
PEG Ratio173.30
Price to Book (P/B)N/A
Price to Sales (P/S)6.90
Price to Cash Flow (P/CF)-100.80
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$47.00Price Target Upside83.02% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
Simulations Plus Business Overview & Revenue Model
Company DescriptionSimulations Plus (SLP) is a leading provider of modeling and simulation software solutions for the pharmaceutical, biotechnology, and chemical industries. With a focus on improving the efficiency and effectiveness of drug development and chemical safety assessment, the company offers a range of software products and consulting services that facilitate predictive modeling and data analysis. These tools assist in decision-making processes related to drug discovery, development, and regulatory submissions.
How the Company Makes MoneySimulations Plus generates revenue primarily through the sale of its software products, which are licensed to clients on a subscription basis or through perpetual licensing agreements. Additionally, the company offers consulting and training services, providing expertise in pharmacokinetics, pharmacodynamics, and related fields. Key revenue streams include software licensing fees, maintenance and support fees, and fees for consulting services. Partnerships with academic institutions, government agencies, and industry leaders also contribute to its earnings by expanding its customer base and enhancing its product offerings.
Simulations Plus Financial Statement Overview
Summary
Simulations Plus presents strong revenue growth and a robust balance sheet with minimal leverage risk. However, the company is facing pressure on profitability margins and a decline in free cash flow growth, which could pose concerns if the trend continues.Income Statement
Simulations Plus shows solid revenue growth with a TTM revenue increase of 6.3% compared to the previous year. The gross profit margin for TTM is 58.5%, indicating efficient cost management. However, the net profit margin has decreased slightly to 11.0% in TTM, reflecting some pressure on profitability. EBIT and EBITDA margins are also lower in TTM at 7.1% and 13.3% respectively, hinting at increased operational costs or other challenges.75
Positive
Balance Sheet
The company's balance sheet is strong with a low debt-to-equity ratio of 0.007, suggesting minimal leverage risk. Return on Equity (ROE) is stable at 4.4% for TTM, showcasing decent profitability on shareholders' equity. The equity ratio of 93.8% for TTM highlights a robust financial structure with ample equity backing assets.82
Very Positive
Cash Flow
Cash flow analysis shows a decline in free cash flow growth, with a negative growth rate compared to the previous year. The operating cash flow to net income ratio stands at 1.45, indicating good cash generation relative to net income. However, the free cash flow to net income ratio has decreased to 1.05 in TTM, suggesting tighter cash availability for reinvestment or dividends.70
Positive
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 74.44M | 70.01M | 59.58M | 53.91M | 46.47M | 41.59M | Gross Profit |
| 43.52M | 43.15M | 47.95M | 43.08M | 35.87M | 30.94M | EBIT |
| 5.30M | 6.13M | 8.72M | 11.34M | 7.86M | 8.89M | EBITDA |
| 9.87M | 11.80M | 12.56M | 18.48M | 14.70M | 11.85M | Net Income Common Stockholders |
| 8.17M | 9.95M | 9.96M | 12.48M | 9.78M | 9.33M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 8.64M | 20.25M | 115.46M | 128.24M | 123.60M | 116.01M | Total Assets |
| 13.61M | 196.64M | 186.10M | 188.38M | 179.98M | 168.42M | Total Debt |
| 0.00 | 1.01M | 1.20M | 1.40M | 1.28M | 926.78K | Net Debt |
| -8.64M | -9.30M | -56.33M | -50.16M | -35.71M | -48.28M | Total Liabilities |
| 2.15M | 14.21M | 16.07M | 10.13M | 14.20M | 12.39M | Stockholders Equity |
| 11.46M | 182.43M | 170.03M | 178.25M | 165.78M | 156.04M |
| Cash Flow | Free Cash Flow | ||||
| 8.60M | 12.75M | 17.58M | 13.93M | 14.63M | 8.33M | Operating Cash Flow |
| 11.88M | 13.32M | 21.86M | 17.90M | 19.20M | 10.91M | Investing Cash Flow |
| -40.24M | -53.97M | 7.37M | 4.30M | -26.74M | -75.51M | Financing Cash Flow |
| -5.25M | -6.57M | -23.27M | -7.62M | -4.68M | 102.37M |
Simulations Plus Technical Analysis
Negative
25.68
Price Trends
29.97
Negative
30.01
Negative
33.05
Negative
Market Momentum
-1.70
Negative
30.12
Neutral
24.86
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SLP, the sentiment is Negative. The current price of 25.68 is above the 20-day moving average (MA) of 25.30, below the 50-day MA of 29.97, and below the 200-day MA of 33.05, indicating a neutral trend. The MACD of -1.70 indicates Negative momentum. The RSI at 30.12 is Neutral, neither overbought nor oversold. The STOCH value of 24.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SLP.
Simulations Plus Risk Analysis
Simulations Plus disclosed 44 risk factors in its most recent earnings report. Simulations Plus reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Simulations Plus Peers Comparison
Overall Rating
UnderperformOutperform
Sector (48)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $36.04B | 51.15 | 13.63% | ― | 16.20% | 34.71% | |
70 Outperform | $29.57B | 22.37 | 22.55% | ― | 2.95% | 2.46% | |
66 Neutral | $12.09B | 223.38 | 0.76% | ― | 14.76% | -88.32% | |
63 Neutral | $478.50M | 66.95 | 3.96% | 1.01% | 19.84% | -22.84% | |
60 Neutral | $6.92B | 533.72 | 0.45% | ― | -1.92% | -96.95% | |
48 Neutral | $6.86B | 1.11 | -50.22% | 2.47% | 16.71% | 1.53% | |
45 Neutral | $1.31B | ― | -52.46% | ― | -1.26% | -338.56% |
* Healthcare Sector Average
Performance Comparison
SLP
Simulations Plus
25.68
-23.60
-47.89%
CRL
Charles River Labs
136.90
-118.02
-46.30%
INCY
Incyte
60.58
5.53
10.05%
IQV
IQVIA Holdings
154.73
-86.77
-35.93%
VEEV
Veeva Systems
213.68
-1.29
-0.60%
TDOC
Teladoc
7.29
-7.33
-50.14%
Simulations Plus Earnings Call Summary
Earnings Call Date: Apr 3, 2025 | % Change Since: 7.81% | Next Earnings Date: Jul 9, 2025
Earnings Call Sentiment Neutral
The earnings call revealed a strong performance in revenue growth and software segment success, with reaffirmed guidance for fiscal year 2025. However, challenges in project initiation, decreased gross margins, and lower net income and EPS were notable lowlights.Highlights
Significant Revenue Growth
Total revenue increased 23% year-over-year to $22.4 million, with organic growth of 5% excluding contributions from new business units.
Strong Software Segment Performance
Software revenue grew by 16%, with renewal rates remaining at historical levels and new logo sales tracking well, despite funding challenges. QSP business unit revenue surged by 89%, largely driven by a model license for atopic dermatitis.
Service Segment Success
Services revenue grew by 34%, led by strong performance in CPP and MC business units. Ended the quarter with a backlog of $20.4 million, up 18% from the previous quarter.
Positive Financial Metrics
Adjusted diluted EPS was $0.31, and adjusted EBITDA was $6.6 million or 29% of revenue. The company remains well-capitalized with $21.4 million in cash and no debt.
Reaffirmed Fiscal Year Guidance
The company reaffirmed guidance for fiscal year 2025 with expected total revenue between $90 million to $93 million, and year-over-year revenue growth between 28% to 33%.
Lowlights
Challenges in Project Initiation
Clients have remained slow to initiate project starts, leading to a delay in service revenue realization to the second half of the fiscal year.
Decreased Gross Margin
Total gross margin for the quarter was 59%, down from 72% in the prior year quarter. Software gross margin decreased from 88% to 81%, and services gross margin from 44% to 25%.
Lower Net Income and EPS
Net income for the quarter was $3.1 million or 14% of revenue, compared to $4 million or 22% of revenue last year. Diluted EPS decreased to $0.15 from $0.20 last year.
Decline in PBPK Services Revenue
PBPK services revenue decreased by 23%, reflecting the cautious pace of project initiation.
Company Guidance
During the Simulations Plus second quarter fiscal 2025 conference call, the company reported a 23% year-over-year increase in total revenue, reaching $22.4 million, with 5% organic growth excluding contributions from the Adaptive Learning & Insights (ALI) and Medical Communication (MC) business units. The software segment saw a 16% revenue growth, contributing 60% to total revenue, while services revenue increased by 34%, making up 40% of total revenue. The company's diluted EPS stood at $0.15, with an adjusted diluted EPS of $0.31 and an adjusted EBITDA of $6.6 million, equivalent to 29% of revenue. Software renewal rates based on fees were 90%, with average software revenue per customer rising to $124,000. The services segment faced a push of revenue to the fiscal year's back half due to delayed project initiations, although bookings were robust, ending with a backlog of $20.4 million. Looking ahead, Simulations Plus reaffirmed its fiscal 2025 guidance, expecting total revenue of $90 million to $93 million, with ALI and MC anticipated to contribute $15 million to $18 million. Adjusted EBITDA margin is forecasted between 31% to 33%, with adjusted diluted EPS projected to be between $1.07 and $1.20.Simulations Plus Corporate Events
Business Operations and StrategyFinancial Disclosures
Simulations Plus Reports Strong Start to Fiscal 2025
Positive
Jan 7, 2025
Simulations Plus reported a strong start to fiscal 2025 with a 31% increase in total revenue for the first quarter, primarily driven by a 41% growth in software revenue. The company noted significant contributions from its MonolixSuite and Quantitative Systems Pharmacology business units, despite facing temporary headwinds in services revenue. Management expressed optimism for continued momentum in the latter half of the year, aligning with their fiscal guidance for 2025.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.