Simulations Plus (SLP) AI Stock Analysis

• Market Cap: $395.64M
• Dividend Yield: N/A
• Average Volume (3M): 408.45K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.11
• Revenue Growth: 13.09%
• EPS Growth: -745.95%
• Country: US
• Employees: 243
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Healthcare Information Services
• EPS (TTM): 0.10
• Shares Outstanding: 20,144,564
• 10 Day Avg. Volume: 447,358
• 30 Day Avg. Volume: 408,451
• PEG Ratio: <0.01
• Price to Book (P/B): 2.28
• Price to Sales (P/S): 3.60
• P/FCF Ratio: 16.36
• Enterprise Value/Market Cap: 0.64
• Enterprise Value/Revenue: 3.16
• Enterprise Value/Gross Profit: 5.87
• Enterprise Value/Ebitda: 18.45
• 1Y Price Target: $20.50
• Price Target Upside: 18.43% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 57 Neutral
• Price Target: $20.50 ▲(18.43% Upside)

The overall stock score is primarily influenced by financial performance challenges, including declining revenue and profitability. Technical analysis shows short-term strength, but valuation remains unattractive due to negative earnings. The earnings call provides a mixed outlook with strategic initiatives for future growth but current financial setbacks.

Positive Factors

Strong Financial Position

A robust financial position with significant cash reserves and no debt enhances financial stability and flexibility, supporting long-term growth initiatives.

Strategic Transition and Integration

This strategic integration is expected to enhance customer service and operational efficiency, positioning the company for sustained competitive advantage.

FDA Regulatory Guidance

The FDA's guidance aligns with SLP's capabilities, potentially increasing demand for its simulation platforms, fostering long-term growth in the pharmaceutical sector.

Negative Factors

Declining Profitability

The significant net loss and impairment charge highlight challenges in maintaining profitability, which could impact future financial performance and investor confidence.

Renewal Rate Challenges

Lower renewal rates indicate potential customer retention issues, which could affect long-term revenue stability and necessitate strategic adjustments.

Fourth Quarter Revenue Decline

The decline in quarterly revenue suggests potential headwinds in market demand or operational execution, posing risks to achieving future growth targets.

Simulations Plus Business Overview & Revenue Model

Company Description

Simulations Plus, Inc. develops drug discovery and development software for modeling and simulation, and prediction of molecular properties utilizing artificial intelligence and machine learning based technology worldwide. It operates through four segments: Simulations Plus, Cognigen, DILIsym, and Lixoft. The company offers GastroPlus, which simulates the absorption and drug interaction of compounds administered to humans and animals; and DDDPlus and MembranePlus simulation products. It also provides products based on mechanistic and mathematical models, such as DILIsym, a quantitative systems pharmacology software; NAFLDsym; IPFsym; RENAsym; and MITOsym. In addition, the company provides Absorption, Distribution, Metabolism, Excretion, and Toxicity Predictor for chemistry-based computer program that takes molecular structures as inputs and predicts their properties; and MedChem Designer, as well as modeling and simulation products comprising MonolixSuite and PKPlus. Further, it provides population modeling and simulation contract research services; training and consulting services designed to accelerate pharmacometrics studies; and clinical-pharmacology-based consulting services in support of regulatory submissions. The company serves pharmaceutical, biotechnology, agrochemical, cosmetics, and food companies, as well as academic and regulatory agencies. Simulations Plus, Inc. was incorporated in 1996 and is headquartered in Lancaster, California.

How the Company Makes Money

Simulations Plus generates revenue primarily through the sale of software licenses, maintenance contracts, and consulting services. The company offers its software products on a subscription basis, which provides a steady stream of recurring income. Additionally, SLP earns revenue from training programs and technical support services related to its software solutions. Partnerships with pharmaceutical and biotechnology companies enhance its market presence and contribute to its earnings, as these collaborations often lead to joint projects and increased software utilization. The company also benefits from a growing demand for computational modeling in drug development, which further drives its revenue growth.

Simulations Plus Financial Statement Overview

Summary

Simulations Plus faces challenges with declining revenue and profitability, impacting its income statement. However, the balance sheet remains strong with low leverage, and cash flow metrics indicate good cash management. The company needs to address operational inefficiencies to improve profitability.

Income Statement

Simulations Plus has experienced a significant decline in revenue and profitability in the latest year, with a negative revenue growth rate and net profit margin. The gross profit margin remains relatively stable, but the EBIT and EBITDA margins have turned negative, indicating operational challenges.

Balance Sheet

The company maintains a strong equity position with a low debt-to-equity ratio, suggesting financial stability. However, the return on equity has turned negative, reflecting recent losses and impacting overall financial performance.

Cash Flow

Despite the decline in net income, Simulations Plus has shown positive free cash flow growth and maintains a strong operating cash flow to net income ratio. This indicates effective cash management, although the free cash flow to net income ratio has slightly decreased.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	80.38M	79.18M	70.01M	59.58M	53.91M	46.47M
Gross Profit	43.20M	46.22M	43.15M	47.95M	43.08M	35.87M
EBITDA	13.74M	-70.73M	11.80M	12.56M	18.48M	14.70M
Net Income	-63.19M	-64.72M	9.95M	9.96M	12.48M	9.78M
Balance Sheet
Total Assets	134.36M	131.94M	207.64M	192.64M	190.50M	181.61M
Cash, Cash Equivalents and Short-Term Investments	28.45M	32.35M	20.25M	115.46M	128.24M	123.60M
Total Debt	719.00K	616.00K	1.01M	1.20M	1.40M	1.28M
Total Liabilities	10.58M	7.13M	25.21M	22.61M	12.26M	15.83M
Stockholders Equity	123.78M	124.80M	182.43M	170.03M	178.25M	165.78M
Cash Flow
Free Cash Flow	13.03M	17.41M	12.75M	17.58M	13.93M	14.63M
Operating Cash Flow	14.20M	18.13M	13.32M	21.86M	17.90M	19.20M
Investing Cash Flow	-94.15M	3.56M	-53.97M	7.37M	4.30M	-26.74M
Financing Cash Flow	-2.20M	-1.15M	-6.57M	-23.27M	-7.62M	-4.68M

Simulations Plus Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 17.31
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SLP, the sentiment is Positive. The current price of 17.31 is below the 20-day moving average (MA) of 17.76, above the 50-day MA of 16.98, and below the 200-day MA of 20.95, indicating a neutral trend. The MACD of 0.78 indicates Negative momentum. The RSI at 64.89 is Neutral, neither overbought nor oversold. The STOCH value of 78.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SLP.

Simulations Plus Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HSTM	66 Neutral	$719.75M	35.56	5.87%	0.51%	3.68%	5.62%
CERT	63 Neutral	$1.47B	136.80	1.03%	―	11.47%	―
OMDA	58 Neutral	$1.01B	―	―	―	50.51%	50.92%
SLP	57 Neutral	$395.64M	―	-42.13%	―	13.09%	-745.95%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
SOPH	51 Neutral	$316.27M	-4.26	-86.09%	―	13.66%	-2.65%
EVH	47 Neutral	$439.71M	―	-13.63%	―	-16.65%	-71.92%