As an investor, I look for investments which does not compromise one fundamental factor for another. By this I mean, I look at stocks holistically, from their financial health to their future outlook. In the case of Simulations Plus Inc (NASDAQ:SLP), it is a company with great financial health as well as a a great history of performance. Below is a brief commentary on these key aspects. If you’re interested in understanding beyond my high-level commentary, read the full report on Simulations Plus here.
Outstanding track record with flawless balance sheet
In the previous year, SLP has ramped up its bottom line by 61%, with its latest earnings level surpassing its average level over the last five years. The strong earnings growth is reflected in impressive double-digit 28% return to shareholders, which paints a buoyant picture for the company. SLP is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This indicates that SLP has sufficient cash flows and proper cash management in place, which is a crucial insight into the health of the company. Looking at SLP’s capital structure, the company has no debt on its balance sheet. This implies that the company is running its operations purely on off equity funding. which is typically normal for a small-cap company. Investors’ risk associated with debt is virtually non-existent and the company has plenty of headroom to grow debt in the future, should the need arise.
For Simulations Plus, there are three important aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for SLP’s future growth? Take a look at our free research report of analyst consensus for SLP’s outlook.
- Valuation: What is SLP worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether SLP is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of SLP? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.