D-Wave Quantum falls nearly 3% as earnings miss overshadows revenue beat
Investing.com - Simulations Plus (NASDAQ:SLP), currently trading at $17.47 and near its 52-week low of $16.72, maintained its Buy rating and $25.00 price target at BTIG following its fiscal third-quarter 2025 earnings report released Monday. According to InvestingPro data, the stock appears undervalued based on its Fair Value analysis, with analysts setting targets ranging from $25 to $36.
The biosimulation company reported revenue of $20.4 million, representing a 9.8% year-over-year increase and exceeding both BTIG and consensus estimates of $20.1 million. Adjusted EBITDA reached $7.4 million, growing 33% year-over-year and surpassing expectations of $6.6 million from BTIG and $5.5 million from consensus. The company maintains strong financial health with a current ratio of 4.37, indicating robust liquidity, and operates with minimal debt according to InvestingPro metrics.
Simulations Plus achieved an adjusted EBITDA margin of 36.5% in the quarter, an improvement of 640 basis points year-over-year and 720 basis points sequentially. The company’s recent workforce reductions are expected to generate approximately $4 million in annual savings, with benefits beginning to materialize in fiscal fourth-quarter 2025.
The company reaffirmed its fiscal 2025 revenue guidance while providing adjusted diluted EPS guidance of $0.93-$1.06. However, its adjusted EBITDA margin guidance of 23-27% fell below previous estimates, which BTIG suggests may be conservative given current performance.
Despite maintaining a positive long-term outlook due to industry shifts from traditional animal testing to biosimulation, BTIG noted significant near-term challenges facing Simulations Plus, including regulatory pressures from the Inflation Reduction Act, drug pricing reforms, and broader industry headwinds that have resulted in organic revenue declining 3% year-over-year for the third quarter. For deeper insights into SLP’s valuation and growth prospects, including 12 additional ProTips and comprehensive financial analysis, visit InvestingPro to access the full Pro Research Report.
In other recent news, Simulations Plus reported fiscal third-quarter 2025 revenue of $20.4 million, marking a 10% year-over-year increase and surpassing analyst expectations of $19.5 million. The company’s adjusted earnings per share significantly exceeded estimates, coming in at $0.45 compared to the anticipated $0.25. Despite these positive earnings results, KeyBanc downgraded Simulations Plus from Overweight to Sector Weight, citing challenges in the biopharma market and a $2 million cancellation from a biotech client. Simulations Plus also announced a $1 million investment in Nurocor, a clinical trial technology firm, as part of its Corporate Development Initiative. The company aims to support early-stage tech companies that align with its growth strategy. Additionally, Simulations Plus updated its fiscal 2025 guidance, projecting revenue between $76 million and $80 million and adjusted earnings per share between $0.93 and $1.06. This guidance is in line with analyst expectations. The company is undergoing a strategic reorganization to streamline operations and focus on growth opportunities. Citizens JMP maintained its Market Perform rating for Simulations Plus, highlighting the company’s strong adjusted EBITDA performance.
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