Simulations Plus (SLP) AI Stock Analysis

• Market Cap: $341.08M
• Dividend Yield: 1.42%
• Average Volume (3M): 507.42K
• Price to Earnings (P/E): 47.5
• Beta (1Y): 1.11
• Revenue Growth: 20.01%
• EPS Growth: -750.59%
• Country: US
• Employees: 243
• Sector: Healthcare
• Sector Strength: 40
• Industry: Medical - Healthcare Information Services
• EPS (TTM): 0.45
• Shares Outstanding: 20,111,046
• 10 Day Avg. Volume: 387,919
• 30 Day Avg. Volume: 507,420
• PEG Ratio: <0.01
• Price to Book (P/B): 2.15
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 20.38
• Enterprise Value/Market Cap: 0.69
• Enterprise Value/Revenue: 0.77
• Enterprise Value/Gross Profit: 5.43
• Enterprise Value/Ebitda: -6.33
• 1Y Price Target: $26.50
• Price Target Upside: 51.69% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 63 Neutral
• Price Target: $18.50 ▲(5.90%Upside)

Simulations Plus demonstrates solid financial health and promising revenue growth, particularly in the software segment. However, technical analysis reveals bearish momentum, and the stock appears overvalued with a high P/E ratio. Positive earnings call and corporate events suggest potential for future growth, though challenges with project initiation and margins remain concerns.

Positive Factors

Financial Performance

Simulations Plus reported revenue of $22.4 million, outperforming estimates due to better-than-expected software and service sales.

Growth Prospects

The streamlined structure is expected to allow for a more robust sales and marketing team across both software and services, further improvement to cross-selling opportunities, and greater agility in rolling out product updates and improvements.

Market Position

Analyst believes that SLP is well positioned to grow revenues and profits and with increasing interest in AI, seeing this as a stock to own for growth investors.

Negative Factors

Client Activity

The company's biopharma clients are reducing their budgets, canceling work, and delaying projects at a greater rate than experienced over the past two years.

Guidance and Outlook

Simulations Plus announced preliminary third quarter fiscal 2025 revenue and updated its fiscal 2025 revenue guidance range, which is well below expectations.

Market Conditions

The announcement attributed the cut to significant headwinds related to market uncertainty over future funding, drug pricing, and potential tariffs.

Simulations Plus Business Overview & Revenue Model

Company Description

Simulations Plus (SLP) is a leading provider of modeling and simulation software for the pharmaceutical, biotechnology, and chemical industries. The company specializes in developing advanced software solutions that facilitate drug discovery, development, and regulatory submissions. Its core products include GastroPlus, DDDPlus, MembranePlus, and ADMET Predictor, which are used by researchers and scientists to model and predict the absorption, distribution, metabolism, excretion, and toxicity (ADMET) of drugs and other compounds.

How the Company Makes Money

Simulations Plus generates revenue primarily through the sale of its software licenses and the provision of consulting services. The company offers various licensing models, including perpetual licenses, annual licenses, and subscriptions, allowing clients to choose the model that best fits their needs. In addition to software sales, Simulations Plus provides customized consulting services to support clients in addressing specific scientific challenges, which forms a significant part of its revenue. Partnerships with pharmaceutical companies, research institutions, and regulatory agencies enhance its market reach and contribute to its earnings. The company also benefits from recurring revenue streams through software maintenance and support contracts, providing ongoing customer support and software updates.

Simulations Plus Financial Statement Overview

Summary

Simulations Plus shows strong financial health with significant revenue growth and a robust balance sheet characterized by low leverage and a high equity ratio. Despite some declines in net profit margins and free cash flow, the company demonstrates efficient cash management and operational efficiency.

Income Statement

Simulations Plus shows strong revenue growth with a TTM revenue of $78.56 million, up from $70.01 million annually, indicating a positive trend. The gross profit margin is solid at approximately 55.26%, though net profit margin declined from 14.22% to 9.19% over the TTM, possibly due to increased operational costs. The EBIT and EBITDA margins remain healthy at 4.54% and 8.96% respectively, demonstrating operational efficiency.

Balance Sheet

The company maintains a robust financial position with a low debt-to-equity ratio of approximately 0.0042, reflecting minimal leverage. The equity ratio is very strong at around 94.12%, suggesting high asset backing by equity. ROE stands at a solid 3.81% in the TTM, though it has declined from 5.46% annually, indicating slightly reduced profitability per unit of equity.

Cash Flow

Operating cash flow to net income ratio is strong at 1.63, indicating efficient cash conversion. Free cash flow decreased from $12.75 million to $9.91 million, reflecting a decline in free cash flow growth, potentially due to increased capital investments. The free cash flow to net income ratio remains healthy at 1.37, underscoring good cash management.

Breakdown	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement
Total Revenue	70.01M	59.58M	53.91M	46.47M	41.59M
Gross Profit	43.15M	47.95M	43.08M	35.87M	30.94M
EBITDA	11.80M	12.56M	18.48M	14.70M	11.85M
Net Income	9.95M	9.96M	12.48M	9.78M	9.33M
Balance Sheet
Total Assets	196.64M	186.10M	188.38M	179.98M	168.42M
Cash, Cash Equivalents and Short-Term Investments	20.25M	115.46M	128.24M	123.60M	116.01M
Total Debt	1.01M	1.20M	1.40M	1.28M	926.78K
Total Liabilities	14.21M	16.07M	10.13M	14.20M	12.39M
Stockholders Equity	182.43M	170.03M	178.25M	165.78M	156.04M
Cash Flow
Free Cash Flow	12.75M	17.58M	13.93M	14.63M	8.33M
Operating Cash Flow	13.32M	21.86M	17.90M	19.20M	10.91M
Investing Cash Flow	-53.97M	7.37M	4.30M	-26.74M	-75.51M
Financing Cash Flow	-6.57M	-23.27M	-7.62M	-4.68M	102.37M

Simulations Plus Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 17.47
• 50DMA: Negative
• 100DMA: Negative
• 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 Negative. The current price of 17.47 is below the 20-day moving average (MA) of 17.63, below the 50-day MA of 25.07, and below the 200-day MA of 29.10, indicating a bearish trend. The MACD of -2.17 indicates Negative momentum. The RSI at 33.05 is Neutral, neither overbought nor oversold. The STOCH value of 26.68 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SLP.

Simulations Plus Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CERT	73 Outperform	$1.81B	―	-0.25%	―	9.37%	95.72%
OMCL	70 Outperform	$1.29B	59.95	1.73%	―	3.00%	―
SLP	63 Neutral	$341.08M	47.47	-41.49%	1.42%	20.01%	-750.59%
SOPH	59 Neutral	$231.24M	―	-60.75%	―	4.66%	11.33%
SDGR	53 Neutral	$1.54B	―	-43.33%	―	22.29%	-32.89%
Sector *	52 Neutral	$7.53B	0.20	-63.81%	2.31%	16.15%	0.40%

Simulations Plus Corporate Events

Simulations Plus Reports Q3 Revenue Growth Amidst Loss

On July 14, 2025, Simulations Plus reported its third quarter fiscal 2025 financial results, showing a 10% increase in total revenue to $20.4 million compared to the previous year. Despite a net loss of $67.3 million due to a non-cash impairment charge, the company saw growth in both software and services revenue. The company also implemented a strategic reorganization to streamline operations and focus on AI-driven initiatives to maintain its competitive edge in the biosimulation market.

The most recent analyst rating on (SLP) stock is a Buy with a $56.00 price target. To see the full list of analyst forecasts on Simulations Plus stock, see the SLP Stock Forecast page.

Simulations Plus Reschedules Q3 2025 Earnings Release

Simulations Plus, Inc. announced the rescheduling of its third quarter fiscal 2025 earnings release and conference call, initially set for July 2, 2025, now moved to July 14, 2025. This adjustment follows the company’s transition from a large accelerated filer to a non-accelerated filer, allowing it to use the full regulatory time for releasing financial results. The company reaffirmed its preliminary third quarter revenue estimates of $19 to $20 million and full-year 2025 revenue guidance of $76 to $80 million. These figures are preliminary and subject to adjustments in the final financial statements.

The most recent analyst rating on (SLP) stock is a Buy with a $56.00 price target. To see the full list of analyst forecasts on Simulations Plus stock, see the SLP Stock Forecast page.

Simulations Plus Announces Q3 Revenue and Strategic Changes

On June 11, 2025, Simulations Plus announced preliminary revenue figures for its third fiscal quarter, expecting between $19 million and $20 million, and updated its full-year revenue guidance to range between $76 million and $80 million. The company is facing market uncertainties impacting its pharmaceutical and biotech clients, leading to budget cuts and project delays. In response, Simulations Plus has reorganized its operations to a functionally driven model and made key leadership appointments to enhance client engagement and sales capabilities, aiming for long-term growth and operational efficiency.

The most recent analyst rating on (SLP) stock is a Buy with a $56.00 price target. To see the full list of analyst forecasts on Simulations Plus stock, see the SLP Stock Forecast page.

Simulations Plus Restructures Operations and Leadership

On May 30, 2025, Simulations Plus, Inc. announced a restructuring of its operations, which included reducing its workforce by approximately 10%, or 23 employees, to enhance operational efficiency and reduce expenses. This restructuring is expected to incur charges of about $0.7 million but aims to save approximately $4.3 million annually. Additionally, the company made significant leadership changes, including appointing John DiBella as Chief Revenue Officer, while other executives assumed new roles to support the company’s strategic goals.

The most recent analyst rating on (SLP) stock is a Buy with a $56.00 price target. To see the full list of analyst forecasts on Simulations Plus stock, see the SLP Stock Forecast page.