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Simulations Plus (SLP) to Post Q2 Earnings: What to Expect?

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Zacks Equity Research
·3 min read
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Simulations Plus, Inc. SLP is scheduled to release second-quarter fiscal 2021 results on Apr 12.

The Zacks Consensus Estimate for fiscal second-quarter revenues stands at $12.93 million, suggesting growth of 24.9% from the year-ago reported figure.

The consensus for fiscal second-quarter earnings has been steady over the past 30 days at 14 cents per share, indicating an improvement of 16.7% on a year-over-year basis.

Simulations Plus, Inc. Price and EPS Surprise

Simulations Plus, Inc. Price and EPS Surprise
Simulations Plus, Inc. Price and EPS Surprise

Simulations Plus, Inc. price-eps-surprise | Simulations Plus, Inc. Quote

Factors Likely to Have Influenced Q2 Results

Simulations Plus’ fiscal second-quarter performance is likely to have benefited from strength in its diversified product portfolio, which includes GastroPlus, DDDPlus, MembranePlus and PKPlus.

During the quarter under review, the company released version 9.8.1 of its flagship physiologically based biopharmaceutics (PBBM)/pharmacokinetics (PBPK) modeling program, GastroPlus. The new version includes enhancements to its validated drug-drug interaction (DDI) models, with more mechanisms, verification, and guidance capabilities. This might have generated incremental revenues in the fiscal second quarter.

Moreover, growing clout of DILIsym, ADMET Predictor, and other software simulation offerings, including MedChem Designer, KIWI, NAFLDsym, RENAsym, Monolix Suite and IPFsym, integrated with advanced analytics capabilities is likely to get reflected in the to-be-reported quarter’s top line.

Further, solid uptick in modeling and simulations workflow platform for drug development across pharma and biotech industries, in the wake of coronavirus-led demand for vaccine research and development, may have aided Simulations Plus’ performance in the quarter under review.

However, the company might have witnessed difficulty in winning new business due to coronavirus pandemic induced disruption. Notably, software renewal rate of 92% in first-quarter fiscal 2021 was lower on account of coronavirus crisis triggered business uncertainty in the clientele’s budgetary process.

Also, broad-based economic weakness led by resurgence in coronavirus cases across Europe, where the company is strengthening its position (Lixoft buyout deserves a special mention), is likely to have impeded renewals and top-line growth in the quarter to be reported.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Simulations Plus this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Simulations Plus has an Earnings ESP of 0.00% and a Zacks Rank #3, which makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks that Warrant a Look

Here are a few companies, which have the right combination of elements to post an earnings beat:

Bank Of Montreal BMO, currently a Zacks #2 Ranked stock, has an Earnings ESP of +8.70%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Target Corporation TGT has an Earnings ESP of +20.34% and a Zacks Rank #3.

Amphenol Corporation APH has an Earnings ESP of +5.60% and a Zacks Rank #3.

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