Citizens JMP reiterates Market Perform rating on Simulations Plus stock

Investing.com - Citizens JMP maintained its Market Perform rating on Simulations Plus (NASDAQ:SLP), currently trading near its 52-week low of $16.72, following the company’s fiscal third-quarter 2025 results released Monday after market close. According to InvestingPro data, the company maintains strong financial health with a current ratio of 4.37, indicating robust liquidity.

Simulations Plus reported revenue of $20.4 million for the quarter, representing a 10% year-over-year increase and exceeding both the analyst’s estimate of $19.5 million and the company’s preliminary revenue expectation range of $19 million to $20 million. This performance contributes to the company’s impressive trailing twelve-month revenue growth of 21.49%.

The revenue growth came despite organic revenue declining by 3% year-over-year, suggesting the overall growth was driven by acquisitions rather than core business expansion.

Adjusted EBITDA reached $7.4 million, showing a significant 31% year-over-year increase and surpassing the analyst’s estimate of $5.5 million.

The company’s gross margin of 64.0% also exceeded the analyst’s projection of 61.8%, contributing to the stronger-than-expected earnings performance.

In other recent news, Simulations Plus reported its third-quarter fiscal 2025 results, with adjusted earnings per share of $0.45, surpassing analyst projections of $0.25. However, the company’s revenue of $20.4 million fell short of the expected $21.84 million, despite a 10% year-over-year increase. The company also recorded a net loss of $67.3 million due to a one-time non-cash impairment charge. Simulations Plus has updated its fiscal 2025 guidance, forecasting revenue between $76 million and $80 million and adjusted earnings per share in the range of $0.93 to $1.06, aligning with analyst expectations. KeyBanc recently downgraded Simulations Plus from Overweight to Sector Weight, citing challenges in the biopharma market and a $2 million cancellation from a single biotech customer. The downgrade reflects concerns about customer concentration and the uncertain recovery in biotech markets. Additionally, Simulations Plus has invested $1 million in Nurocor, a firm specializing in cloud-based clinical trial optimization technology, as part of its Corporate Development Initiative. This investment aligns with Simulations Plus’ strategy to expand its market reach by partnering with innovative technology companies in the pharmaceutical sector.

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