David Larsen, an analyst from BTIG, maintained the Buy rating on Simulations Plus (SLP – Research Report). The associated price target is $55.00.
David Larsen gave his Buy rating based on various factors that he believes contribute to the potential growth and profitability of Simulations Plus. Despite missing BTIG and consensus estimates for total revenue and adjusted EBITDA in F4Q:23, Larsen is positive about the company’s future projections. The GastroPlus software division’s revenue fell short of expectations, but still saw a considerable growth rate of 76% year over year. Furthermore, the Software revenue growth for the year was in line with the company’s guidance and long-term plan. Larsen also noted that the re-contracting and harmonization process resulted in an erratic quarterly revenue growth.
Additionally, Larsen is optimistic about SLP’s revenue guidance for F2024, which he sees as good. While acknowledging that smaller biotech and some biopharma companies are cautious due to a slowdown in the funding environment, he points out that the Fee Renewal rate of 92% for the year still seems healthy. He believes that the fundamentals of SLP’s market are resilient and there is high demand for simulation solutions that accelerate R&D efforts. Services revenue growth was also in line with his model and the number of projects supported by SLP increased significantly from F2022. Although the recent Immunetrics acquisition didn’t significantly contribute to the F2023 revenue, it is expected to have a positive impact in F2024.
According to TipRanks, Larsen is an analyst with an average return of -9.4% and a 30.04% success rate. Larsen covers the Healthcare sector, focusing on stocks such as Sharecare, Health Catalyst, and LifeMD.
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Simulations Plus (SLP) Company Description:
Simulations Plus, Inc. engages in licensing and conducting drug research by pharmaceutical and biotechnology companies. It offers pharmaceutical, and chemical, cosmetics and food industries. The company was founded by Walter S. Woltosz and Virginia E. Woltosz on July 17, 1996 and is headquartered Lancaster, CA.
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