BTIG has adjusted the financial outlook for Simulations Plus (NASDAQ: NASDAQ:SLP), reducing the price target to $50.00 from the previous $60.00 while still holding a Buy rating on the stock.
This decision came following the company's fiscal fourth-quarter results, which were disclosed after the market closed on Wednesday. Simulations Plus reported a revenue of $18.7 million, marking a 19% increase year-over-year but falling short of the $19.7 million expected by both BTIG and the consensus estimate.
The company's adjusted EBITDA for the quarter was $4.1 million, a decrease of 14% compared to the previous year, marginally missing the anticipated $4.2 million by BTIG and $4.3 million consensus estimates.
Despite these figures, Simulations Plus issued financial guidance for fiscal year 2025 that included revenue projections aligning with initial estimates and an adjusted earnings per share (EPS) forecast between $1.07 and $1.20, significantly exceeding BTIG's expectation of $0.63.
The guidance for adjusted EBITDA margin was set at 31-33%, surpassing BTIG's projection of 27%. The analyst expressed optimism about the company's margin improvement trajectory, as Simulations Plus aims for a long-term adjusted EBITDA margin in the range of approximately 35-40%.
In other recent news, Simulations Plus, Inc. reported robust financial results for fiscal year 2024, with total revenue up by 18% to $70 million and a fourth-quarter revenue rise of 19% to $18.7 million. The diluted earnings per share (EPS) for the year reached $0.49, exceeding the projected guidance. The company's strategic acquisitions of Pro-ficiency and Immunetrics have expanded its total addressable market and enhanced its software offerings.
Despite facing renewal delays and challenges in the Asian market, Simulations Plus remains optimistic, projecting a revenue of $90 million to $93 million for fiscal year 2025. This projection indicates a growth of 28% to 33% year-over-year, with anticipated organic growth consistent with the previous year at 10% to 15%.
InvestingPro Insights
To complement the analysis provided by BTIG, recent data from InvestingPro offers additional insights into Simulations Plus (NASDAQ:SLP) financial position and market performance. The company's market capitalization stands at $679.86 million, reflecting its current market valuation.
InvestingPro data shows that Simulations Plus has demonstrated strong revenue growth, with a 20.29% increase in the last twelve months as of Q3 2024. This aligns with the 19% year-over-year revenue growth reported in the fiscal fourth-quarter results mentioned in the article. The company's gross profit margin is impressive at 72.53%, indicating efficient cost management and potentially strong pricing power in its niche market.
Two relevant InvestingPro Tips highlight that Simulations Plus "holds more cash than debt on its balance sheet" and "liquid assets exceed short term obligations." These factors suggest a solid financial foundation, which could support the company's ability to invest in growth initiatives and weather potential economic uncertainties.
It's worth noting that while the article discusses the company's adjusted EBITDA margin guidance of 31-33%, the current EBITDA margin stands at 20.44% according to InvestingPro data. This indicates potential for significant margin expansion if the company achieves its long-term target of 35-40% mentioned by the BTIG analyst.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Simulations Plus, providing a deeper understanding of the company's financial health and market position.
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