Simulations Plus (SLP) Stock Forecast & Price Target

Simulations Plus Inc. has demonstrated stability with its third-quarter total revenue reaching $20.4 million, slightly exceeding guidance expectations and aligning closely with market consensus. The company anticipates organic revenue growth to potentially re-accelerate toward high-single digits in fiscal year 2026, bolstered by the recent Proficiency acquisition despite short-term challenges in customer concentration and biotech exposure. With a revenue mix forecasted at 55-60% from software and 40-45% from services, the firm remains well-positioned to leverage its leading software offerings in pharmaceutical research to drive future growth.

Simulations Plus faces significant headwinds due to challenges in the biopharma end market, especially because of its customer concentration and exposure to the biotech sector, which are expected to weaken demand in the near to middle term without prospects for recovery. In financial performance, the company reported third-quarter software revenue of $12.6 million, falling short of the consensus estimate of $13.6 million, highlighting vulnerabilities in its primary revenue-generating segment. Although the adjusted EBITDA of $7.4 million exceeded expectations, elevated SG&A expenditures of $8.8 million beyond the consensus further illustrate operational inefficiencies that could hinder future growth potential.