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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on SLP

The recent 3-month performance of Simulations Plus, Inc. was negatively impacted by a series of events. The company's guidance was slashed amid biotech spending cuts, with analysts expressing doubt about its prospects. This was followed by a revenue guidance cut, as biopharma market weakness and services segment volatility took a toll on the company's operations. The preliminary third-quarter fiscal 2025 revenue announcement also fell short of expectations, with revenue guidance cut sharply.

1.c. Company Highlights

2. Simulations Plus' Fiscal 2025 Earnings: Strong Execution Amidst Challenging Environment

Simulations Plus closed fiscal 2025 with revenue growth of 13%, reaching $79.2 million, driven by a 12% increase in software revenue and a 15% increase in services revenue. Adjusted EBITDA grew 8% and adjusted EPS also grew 8%. The company's actual EPS came out at $0.06 relative to estimates at $0.07, slightly missing expectations. The operating environment remained challenging due to pharmaceutical headwinds, but Simulations Plus saw early signs of stabilization.

Publication Date: Dec -02

📋 Highlights
  • Revenue & Profit Growth:: Fiscal 2025 revenue grew 13% to $79.2M, with adjusted EBITDA up 8% and adjusted EPS up 8%.
  • Segment Performance:: Software revenue increased 12%, while services revenue rose 15%, despite a 63% decline in Pro-ficiency software revenue in Q4.
  • 2026 Guidance:: Revenue expected between $79M–$82M, with adjusted EBITDA margin of 26–30% and EPS of $1.03–$1.10, including $4M benefit from a reduction in force.
  • AI & Pricing Strategy:: GastroPlus AI capabilities drove client excitement; 2026 pricing increases will leverage AI upgrades, targeting long-term 35% EBITDA margins.
  • Financial Position:: Ended FY2025 with $32.4M in cash, no debt, and a mid-80s software renewal rate, with cautious optimism in biotech and pharma sectors.

Operational Highlights

The company completed its transition to a unified operating model, aligning product and technology, scientific R&D, strategic consulting services, and business development into a single client-focused organization structure. This transformation is expected to drive future growth, with the CEO noting that the company is evolving into a unified ecosystem supporting discovery, development, clinical operations, and commercialization.

Guidance and Outlook

For fiscal year 2026, Simulations Plus expects total revenue to be between $79 million and $82 million, with adjusted EBITDA margin between 26% and 30%. Adjusted diluted earnings per share is expected to be between $1.03 and $1.10. Analysts estimate next year's revenue growth at 1.2%, indicating a slowdown in growth momentum. The company's guidance assumes some challenges in the first quarter due to tough comps, particularly with the Pro-ficiency platform.

Valuation and Pricing

Simulations Plus' current valuation metrics indicate a P/E Ratio of -5.45, a P/S Ratio of 4.28, and an EV/EBITDA of 23.15. The company's plans to introduce more aggressive pricing next year, driven by the rollout of AI capabilities across the platform, are expected to support revenue growth. The pricing increase is part of the upgrades and new platform capabilities, with the monetization of AI functionality coming through separately priced modules and integrated technology.

Business Prospects

The biotech environment is cautiously optimistic, and if funding continues to improve, it could positively impact both software and consulting revenue. However, there is no immediate translation of funding into purchase orders. The company's renewal rate in software remains below previous years, around the mid-80s, due to consolidations and clients scrutinizing module configurations. Nevertheless, this is expected to improve as clients have already undergone scrutiny, and price increases will have a positive effect.

3. NewsRoom

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Why Shares of Simulations Plus Soared This Week

Dec -04

Source: fool.com

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Simulations Plus: Buying On Long-Term Silico Drug-Development

Dec -03

Source: seekingalpha.com

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Why Simulations Plus Stock Was Soaring Today

Dec -02

Source: fool.com

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Simulations Plus Stock Climbs On Earnings Strength, Biotech Market Rebound

Dec -02

Source: benzinga.com

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Simulations Plus' Q4 Earnings & Sales Meet Estimates, Fall Y/Y

Dec -02

Source:

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Simulations Plus, Inc. (SLP) Q4 2025 Earnings Call Transcript

Dec -02

Source: seekingalpha.com

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Simulations Plus Reports Fourth Quarter and Fiscal 2025 Financial Results

Dec -01

Source: businesswire.com

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First Look: Airbus drops, Crypto slides, Cyber Monday

Dec -01

Source: gurufocus.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.54%)

6. Segments

Software

Expected Growth: 10.55%

Strong demand for simulation software in pharmaceutical and biotech industries, driven by increasing adoption of modeling and simulation in drug discovery and development. Growing need for cost-effective and efficient methods to reduce time-to-market, coupled with expanding applications in personalized medicine and gene therapy, fuels growth for Simulations Plus, Inc.'s software.

Services

Expected Growth: 10.53%

Strong demand for simulation and modeling services in pharmaceutical and biotech industries, driven by increasing R&D investments and adoption of model-informed drug development. Growing need for cost-effective and efficient drug discovery processes, coupled with the company's expanding product portfolio and strategic partnerships, contribute to the high growth rate.

7. Detailed Products

GastroPlus

A simulation software for modeling the absorption, distribution, metabolism, and excretion (ADME) of compounds in the gastrointestinal tract.

DDDPlus

A simulation software for modeling the in vitro dissolution and in vivo pharmacokinetics of oral dosage forms.

MembranePlus

A simulation software for modeling the permeability of compounds across biological membranes.

PKPlus

A simulation software for modeling the pharmacokinetics of compounds in humans and animals.

MonolixSuite

A software suite for modeling and simulation of complex biological systems, including pharmacokinetics, pharmacodynamics, and systems biology.

Nelson

A software for modeling and simulation of population pharmacokinetics and pharmacodynamics.

Trial Simulator

A software for simulating clinical trials and predicting the outcomes of different trial designs.

8. Simulations Plus, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Simulations Plus, Inc. is medium due to the presence of alternative software solutions in the market, but the company's strong brand recognition and customer loyalty mitigate this threat.

Bargaining Power Of Customers

The bargaining power of customers is low for Simulations Plus, Inc. due to the company's specialized software solutions and the lack of alternative options for customers.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium for Simulations Plus, Inc. due to the presence of multiple suppliers for the company's software development and maintenance needs.

Threat Of New Entrants

The threat of new entrants is high for Simulations Plus, Inc. due to the relatively low barriers to entry in the software development industry and the presence of venture capital funding for startups.

Intensity Of Rivalry

The intensity of rivalry is high for Simulations Plus, Inc. due to the presence of established competitors in the market and the need for continuous innovation to stay ahead in the market.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 0.70%
Debt Cost 3.95%
Equity Weight 99.30%
Equity Cost 7.31%
WACC 7.29%
Leverage 0.70%

11. Quality Control: Simulations Plus, Inc. passed 8 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
HealthStream

A-Score: 4.8/10

Value: 3.7

Growth: 5.2

Quality: 6.9

Yield: 0.0

Momentum: 4.0

Volatility: 8.7

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Forian

A-Score: 4.3/10

Value: 6.0

Growth: 6.4

Quality: 5.5

Yield: 0.0

Momentum: 6.0

Volatility: 1.7

1-Year Total Return ->

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National Research

A-Score: 4.0/10

Value: 3.4

Growth: 3.6

Quality: 6.0

Yield: 6.0

Momentum: 0.5

Volatility: 4.3

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Teladoc Health

A-Score: 3.4/10

Value: 6.7

Growth: 5.1

Quality: 3.2

Yield: 0.0

Momentum: 3.5

Volatility: 2.0

1-Year Total Return ->

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GeneDx

A-Score: 3.4/10

Value: 0.2

Growth: 4.3

Quality: 5.3

Yield: 0.0

Momentum: 9.5

Volatility: 1.0

1-Year Total Return ->

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Stock-Card
Simulations Plus

A-Score: 3.0/10

Value: 5.6

Growth: 5.7

Quality: 4.2

Yield: 0.0

Momentum: 0.0

Volatility: 2.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

19.42$

Current Price

19.42$

Potential

-0.00%

Expected Cash-Flows