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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 Delivers Mixed Q1 FY2026 Results Amidst Transformation

Simulations Plus reported its first quarter fiscal year 2026 financial results, with revenue decreasing 3% to $18.4 million, in line with internal expectations. Adjusted EBITDA was $3.5 million, and adjusted EPS was $0.13, missing analyst estimates of $0.18. The revenue breakdown shows software revenue decreased 17%, representing 48% of total revenue, while Services revenue increased 16%, representing 52% of total revenue.

Publication Date: Jan -15

📋 Highlights
  • Revenue Decline Mitigated by Strong Services Growth: Total revenue fell 3% to $18.4M, but Services revenue rose 16% to 52% of total revenue, driven by 186 active projects and an 18% backlog increase to $20.4M
  • Client Metrics Reflect Stability: Ended with 302 commercial clients (88% fee retention), $97k average revenue per client, and 88% renewal rate, slightly below historical 90%+ retention
  • Guidance Maintained with Conservative Forecasts: FY2026 revenue projected at $79M–$82M (+0%–4% YoY), software mix of 57%–62%, and adjusted EBITDA margin target of 26%–30%
  • Strategic AI Integration and Product R&D: Launched AI features in GastroPlus, with plans to embed AI in base models; R&D expenses rose due to personnel reallocation for product acceleration
  • Services Margin Optimization Goals: Aiming for 30%–35% services margin by improving billable utilization; Services segment margin under pressure post-FY2025 budget constraints but bookings are rebounding

Segment Performance

The Services segment performed well, with revenue increasing 16% and bookings growth. The company saw an uptick in spending at the client level, which is reflected in good performance in the Services segment. The company ended the quarter with 302 commercial clients, achieving an average revenue per client of $97,000 and an 88% renewal rate, in line with historical rates of around 90%.

Guidance and Outlook

The guidance for fiscal year 2026 remains the same, with total revenue between $79 million to $82 million, year-over-year revenue growth between 0% to 4%, software mix between 57% to 62%, adjusted EBITDA margin between 26% to 30%, and adjusted diluted earnings per share between $1.03 to $1.10. The company anticipates second-quarter revenue to be approximately $21 million to $22 million, indicating a potential rebound.

Transformation and Innovation

The company is transforming into a fully integrated ecosystem that supports discovery, development, clinical operations, and commercialization. This transformation combines validated science, cloud-scale performance, and AI grounded in regulatory-grade modeling. The company has a healthy pipeline of services projects, with total services projects worked on during the quarter at 186 and an ending backlog increase of 18% to $20.4 million.

Valuation and Growth Prospects

With a P/S Ratio of 5.09 and an EV/EBITDA of -6.06, the market seems to be pricing in a certain level of growth. Analysts estimate next year's revenue growth at 6.1%, which could be a positive catalyst. However, the company's ROE and ROIC are currently negative, indicating room for improvement in capital allocation and profitability.

3. NewsRoom

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ROSEN, A LONGSTANDING FIRM, Encourages Simulations Plus, Inc. Investors to Inquire About Securities Class Action Investigation - SLP

Feb -11

Source: newsfilecorp.com

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ROSEN, A TOP-RANKED LAW FIRM, Encourages Simulations Plus, Inc. Investors to Inquire About Securities Class Action Investigation - SLP

Feb -09

Source: newsfilecorp.com

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Rosen Law Firm Encourages Simulations Plus, Inc. Investors to Inquire About Securities Class Action Investigation - SLP

Feb -08

Source: prnewswire.com

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ROSEN, A TOP RANKED LAW FIRM, Encourages Simulations Plus, Inc. Investors to Inquire About Securities Class Action Investigation - SLP

Feb -07

Source: newsfilecorp.com

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SLP Investor News: If You Have Suffered Losses in Simulations Plus, Inc. (NASDAQ: SLP), You Are Encouraged to Contact The Rosen Law Firm About Your Rights

Feb -06

Source: globenewswire.com

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Rosen Law Firm Encourages Simulations Plus, Inc. Investors to Inquire About Securities Class Action Investigation - SLP

Feb -03

Source: prnewswire.com

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SLP Investor News: If You Have Suffered Losses in Simulations Plus, Inc. (NASDAQ: SLP), You Are Encouraged to Contact The Rosen Law Firm About Your Rights

Feb -03

Source: globenewswire.com

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ROSEN, TOP RANKED GLOBAL COUNSEL, Encourages Simulations Plus, Inc. Investors to Inquire About Securities Class Action Investigation - SLP

Feb -01

Source: newsfilecorp.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: 4.5/10

Value: 4.4

Growth: 5.2

Quality: 7.0

Yield: 0.0

Momentum: 2.0

Volatility: 8.7

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Forian

A-Score: 4.3/10

Value: 5.7

Growth: 6.4

Quality: 4.5

Yield: 0.0

Momentum: 7.0

Volatility: 2.3

1-Year Total Return ->

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National Research

A-Score: 4.0/10

Value: 2.4

Growth: 3.6

Quality: 6.0

Yield: 5.0

Momentum: 3.0

Volatility: 4.3

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Teladoc Health

A-Score: 4.0/10

Value: 9.6

Growth: 5.1

Quality: 4.4

Yield: 0.0

Momentum: 2.0

Volatility: 3.0

1-Year Total Return ->

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GeneDx

A-Score: 3.4/10

Value: 0.2

Growth: 4.2

Quality: 5.1

Yield: 0.0

Momentum: 9.5

Volatility: 1.3

1-Year Total Return ->

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Stock-Card
Simulations Plus

A-Score: 2.6/10

Value: 3.6

Growth: 4.1

Quality: 4.1

Yield: 0.0

Momentum: 1.0

Volatility: 2.7

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

11.66$

Current Price

11.66$

Potential

-0.00%

Expected Cash-Flows