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Simulations Plus
(NASDAQ:SLP)
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Rating:74Outperform
Price Target:
$20.50
▲(11.78% Upside)
Action:Upgraded
Date:07/10/26
SLP scores well primarily due to strong financial quality (low leverage, strong free cash flow, and healthy TTM margins) and supportive technical momentum. The score is tempered by a rich valuation (high P/E with no dividend yield provided) and remaining execution risks highlighted in guidance/renewal-rate softness, partially offset by the announced all-cash take-private deal.
Positive Factors
Strong cash generation and conservative balance sheet
Robust operating cash flow and near-parity free cash flow show durable internal funding for R&D, product development and services. Extremely low leverage and a $41.8M cash position provide flexibility to invest, withstand downturns, or pursue strategic M&A without financing strain.
Negative Factors
Softening renewal rates and concentrated churn
Declining renewals and concentration of churn in smaller or precommercial customers weaken the predictability of recurring revenue. Persistent lower renewal trends increase sales and retention investment needs and make revenue growth more sensitive to biotech funding cycles and client program timing.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation and conservative balance sheet
Robust operating cash flow and near-parity free cash flow show durable internal funding for R&D, product development and services. Extremely low leverage and a $41.8M cash position provide flexibility to invest, withstand downturns, or pursue strategic M&A without financing strain.
Read all positive factors
Simulations Plus Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlySimulations Plus (SLP) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$368.70M
Dividend YieldN/A
Average Volume (3M)649.00K
Price to Earnings (P/E)44.5
Beta (1Y)1.44
Revenue Growth2.08%
EPS GrowthN/A
CountryUS
Employees213
SectorHealthcare
Sector Strength45
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.41
Shares Outstanding20,224,838
10 Day Avg. Volume629,779
30 Day Avg. Volume648,998
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)2.28
Price to Sales (P/S)3.60
P/FCF Ratio16.36
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$17.25Price Target Upside-5.94% Downside
Rating ConsensusHold
Number of Analyst Covering4
EPS Forecast (FY)0.88
Revenue Forecast (FY)$81.87M
Simulations Plus Business Overview & Revenue Model
Company Description
Simulations Plus, Inc. (SLP) is a worldwide developer of sophisticated software and services aimed at enhancing drug discovery and development processes. The company employs artificial intelligence and machine learning technologies to create tools...
How the Company Makes Money
Simulations Plus primarily makes money through (1) software revenue and (2) services revenue. Software revenue is generated by licensing its modeling and simulation products to customers (typically pharma/biotech companies, academic institutions, ...
Simulations Plus Earnings Call Summary
Earnings Call Date:Apr 09, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 28, 2026
Earnings Call Sentiment Positive
The call presented a generally positive operational and financial picture: revenue growth (+8% YoY), strong adjusted EBITDA and margin expansion, increased services backlog, high software gross margins, and a solid balance sheet with $41.8M in cash and no debt. Strategic partnerships with three large pharma customers and continued AI integration represent meaningful long-term upside. Offsetting these positives were a pronounced decline in clinical operations revenue (–54%), lower trailing renewal rates (87% TTM), a materially higher effective tax rate (now 23–25%) reducing EPS, reduced other income, and management's deliberately conservative guidance due to macro fragility and limited near-term AI monetization. Overall, the encouraging growth, margins, cash position and strategic progress materially outweigh the notable but contained operational and tax headwinds.Positive Updates
Revenue Growth and Top-Line Beat
Total revenue of $24.3 million in Q2 (up 8% year-over-year). Management noted they exceeded the top-line guidance communicated last quarter.
Negative Updates
Sharp Decline in Clinical Operations Revenue
Clinical operations revenue (primarily from Proficiency) declined 54% in the quarter and 58% on a trailing 12-month basis, representing only ~3% of software revenue — a material weakness in that subsegment.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue Growth and Top-Line Beat
Total revenue of $24.3 million in Q2 (up 8% year-over-year). Management noted they exceeded the top-line guidance communicated last quarter.
Read all positive updates
Company Guidance
Management left fiscal 2026 guidance largely unchanged, forecasting total revenue of $79–82 million (0%–4% year‑over‑year growth), a software mix of 57%–62%, adjusted EBITDA margin of 26%–30% and adjusted diluted EPS of $0.75–0.85 (driven by a revised effective tax rate of 23%–25% versus the prior 12%–14% expectation); for Q3 they expect revenue of $20–22 million, adjusted EBITDA margin of 27%–33% and adjusted diluted EPS of $0.20–0.27 — the company also ended the quarter with $41.8 million in cash and short‑term investments, no debt, and a services backlog of $24.0 million (up 18% year‑over‑year).Simulations Plus Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
78
Positive
Cash Flow
84
Very Positive
| Breakdown | TTM | Nov 2025 | Aug 2024 | Aug 2023 | Aug 2022 | Aug 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 82.06M | 79.18M | 70.01M | 59.58M | 53.91M | 46.47M |
| Gross Profit | 52.01M | 46.22M | 43.15M | 47.95M | 43.08M | 35.87M |
| EBITDA | 13.09M | 14.70M | 18.08M | 13.06M | 18.69M | 14.70M |
| Net Income | 8.11M | -64.72M | 9.95M | 9.96M | 12.48M | 9.78M |
Balance Sheet | ||||||
| Total Assets | 152.98M | 131.94M | 207.64M | 192.64M | 190.50M | 181.61M |
| Cash, Cash Equivalents and Short-Term Investments | 49.99M | 32.35M | 20.25M | 115.46M | 128.24M | 123.60M |
| Total Debt | 487.00K | 616.00K | 1.01M | 1.20M | 1.40M | 1.28M |
| Total Liabilities | 13.94M | 7.13M | 25.21M | 22.61M | 12.26M | 15.83M |
| Stockholders Equity | 139.03M | 124.80M | 182.43M | 170.03M | 178.25M | 165.78M |
Cash Flow | ||||||
| Free Cash Flow | 26.08M | 17.41M | 12.75M | 17.58M | 13.93M | 14.63M |
| Operating Cash Flow | 26.48M | 18.13M | 13.32M | 21.86M | 17.90M | 19.20M |
| Investing Cash Flow | -17.16M | 3.56M | -53.97M | 7.37M | 4.30M | -26.74M |
| Financing Cash Flow | 117.00K | -1.15M | -6.57M | -23.27M | -7.62M | -4.68M |
Simulations Plus Technical Analysis
Positive
18.34
Price Trends
17.56
Positive
15.51
Positive
16.19
Positive
Market Momentum
0.20
Positive
62.20
Neutral
42.65
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 18.34 is above the 20-day moving average (MA) of 18.27, above the 50-day MA of 17.56, and above the 200-day MA of 16.19, indicating a bullish trend. The MACD of 0.20 indicates Positive momentum. The RSI at 62.20 is Neutral, neither overbought nor oversold. The STOCH value of 42.65 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SLP.
Simulations Plus Risk Analysis
Simulations Plus disclosed 47 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
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $819.19M | 42.13 | 6.01% | 0.47% | 6.64% | 6.54% | |
74 Outperform | $368.70M | 44.49 | 6.18% | ― | 2.08% | ― | |
70 Outperform | $1.18B | -172.97 | -2.81% | ― | 49.36% | 83.76% | |
67 Neutral | $1.26B | -84.73 | -1.43% | ― | 6.40% | -477.58% | |
54 Neutral | $475.69M | -4.81 | -140.63% | ― | 20.85% | -18.60% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
47 Neutral | $347.57M | -0.66 | -77.89% | ― | -21.26% | -290.08% |
* Healthcare Sector Average
SLP
Simulations Plus
18.31
5.40
41.83%
HSTM
HealthStream
28.33
2.73
10.68%
EVH
Evolent Health
3.14
-6.36
-66.95%
CERT
Certara
8.18
-1.68
-17.04%
SOPH
SOPHiA GENETICS
5.69
2.27
66.37%
OMDA
Omada Health, Inc.
20.51
3.18
18.35%
Simulations Plus Corporate Events
Business Operations and StrategyFinancial DisclosuresM&A Transactions
Simulations Plus Reports Q3 Growth and Profit Turnaround
Positive
Jul 9, 2026
On July 9, 2026, Simulations Plus reported results for its third fiscal quarter ended May 31, 2026, with total revenue up 7% year over year to $21.9 million, driven by a 20% rise in services revenue to $9.3 million while software revenue held flat...
Delistings and Listing ChangesM&A TransactionsPrivate Placements and Financing
Simulations Plus to Be Acquired by Altaris Affiliate
Positive
Jun 17, 2026
On June 15, 2026, Simulations Plus agreed to be acquired by SP Evolution HoldCo II, an Altaris affiliate, through a cash merger in which shareholders will receive $18.50 per share and the company will become a wholly owned, privately held subsidia...
Business Operations and StrategyDelistings and Listing ChangesM&A TransactionsRegulatory Filings and ComplianceShareholder Meetings
Altaris to Take Simulations Plus Private in Acquisition
Positive
Jun 16, 2026
On June 16, 2026, Simulations Plus, Inc., a provider of model‑informed and AI‑accelerated drug development software and consulting solutions, announced a definitive agreement to be acquired by healthcare‑focused investment firm A...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.