On Friday, Oppenheimer analysts reaffirmed their positive stance on Simulations Plus (NASDAQ:SLP) shares with an Outperform rating and a steady price target of $65.00. With the stock currently trading at $27.91, near its 52-week low of $27.07, and InvestingPro data showing 5 analysts revising earnings upward, the target suggests significant upside potential.
The firm's analysts projected a steady outlook for the company's fiscal first quarter of 2025 results, which are to be disclosed on January 7, 2025, after the market closes.
The confirmation of the rating comes as no surprise given that the fiscal fourth quarter results for 2024 and the guidance for fiscal year 2025 were already announced on October 23, 2024. According to InvestingPro analysis, the company maintains strong financial health with a robust current ratio of 3.26 and operates with minimal debt.
The analysts expressed confidence that there would be no significant surprises in the upcoming report. They anticipate that the company's revenues will align with the previously stated guidance of $90-93 million, reflecting an organic growth rate of 10-15%. The analysts also reiterated their optimism regarding the impact of the Pro-ficiency acquisition, which is expected to contribute $15-18 million to the top line.
Simulations Plus reported a strong fiscal fourth quarter in 2024, with revenues reaching $18.7 million. Based on this performance, Oppenheimer views their own estimate for fiscal first quarter 2025 revenues at $18.5 million, and the Street's consensus of $18.8 million, as quite reasonable. Despite recent weakness in Simulations Plus shares, Oppenheimer analysts believe the company's recent accretive acquisition is transformative for the business.
The firm's analysts concluded their commentary by reiterating their confidence in Simulations Plus's strategy and financial outlook, which underpins their maintained Outperform rating and $65 price target for the company's stock. Investors will be looking forward to the fiscal first quarter results to see if the company's performance aligns with the optimistic predictions.
In other recent news, Simulations Plus announced a robust financial performance for fiscal year 2024, with total revenue rising by 18% to $70 million and a fourth-quarter revenue increase of 19% to $18.7 million. Despite falling short of the $19.7 million expected by BTIG and the consensus estimate, the company issued financial guidance for fiscal year 2025, projecting revenue in line with initial estimates and an adjusted earnings per share (EPS) forecast between $1.07 and $1.20.
Simulations Plus also secured a grant from the U.S. Food and Drug Administration for a collaboration with the University of Strathclyde and InnoGI Technologies. The project aims to advance the understanding and prediction of amorphous solid dispersion (ASD) formulations.
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%.
In response to these developments, BTIG adjusted the financial outlook for Simulations Plus, reducing the price target to $50.00 from the previous $60.00 while maintaining a Buy rating on the stock.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.