Nucor earnings beat by $0.08, revenue fell short of estimates
JMP Securities maintained its Market Perform rating on Simulations Plus (NASDAQ:SLP) on Wednesday. The firm significantly reduced its financial forecasts for the pharmaceutical software company, citing near-term macroeconomic uncertainty. The stock, which has declined over 30% in the past week, currently trades at a P/E ratio of 91.8x, according to InvestingPro data.
The investment bank lowered its fiscal year 2025 revenue estimate to $78.3 million from $90.2 million, representing a 13.2% reduction. JMP also cut its FY25 adjusted EBITDA forecast to $22.0 million from $28.5 million. Despite these reductions, InvestingPro analysis suggests the stock is currently trading below its Fair Value, with strong financial health indicators including a current ratio of 4.37.
Looking further ahead, the firm trimmed its fiscal year 2026 projections as well, reducing revenue estimates to $83.0 million from $100.5 million and adjusted EBITDA to $25.0 million from $33.9 million.
Despite the reduced financial outlook, JMP expressed continued confidence in Simulations Plus’s competitive positioning and comprehensive solution suite within the pharmaceutical modeling and simulation market.
The firm noted that Simulations Plus recently traded at 15.6 times JMP’s calendar year 2025 adjusted EBITDA estimate, representing an 11% premium to competitor Certara (NASDAQ:CERT), which JMP also rates as Market Perform.
In other recent news, Simulations Plus has announced a significant reduction in its fiscal 2025 revenue guidance, projecting third-quarter revenue between $19 million and $20 million and full-year revenue between $76 million and $80 million. This adjustment comes amid market uncertainties affecting its biopharma clients, including funding issues and drug pricing challenges. The company has also unveiled a restructuring plan, which includes a workforce reduction of about 10% and several leadership changes, such as the appointment of John DiBella as Chief Revenue Officer. Furthermore, Simulations Plus launched DILIsym 11, an update to its toxicology software, which now includes a pediatric module for predicting drug-induced liver injury in children. On the financial front, the company has appointed Grant Thornton LLP as its new independent auditor, replacing Rose, Snyder & Jacobs LLC, following a competitive selection process. Analyst firm Stephens has lowered its price target for Simulations Plus to $28 from $42, maintaining an Overweight rating despite the company’s revenue guidance cut. The firm highlights potential positive factors, such as a shift in product mix and FDA support for biosimulation. These developments reflect the company’s ongoing efforts to adapt to market conditions and enhance operational efficiency.
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