Simulations Plus Gears Up for Q1 Earnings: What’s in Store?

Simulations Plus, Inc (SLP Quick QuoteSLP – Free Report) is slated to release first-quarter fiscal 2025 results on Jan. 7.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar. 

The Zacks Consensus Estimate for fiscal first-quarter revenues is pegged at $18.7 million, which indicates growth of 28.9% from the year-ago quarter’s reported figure.

The consensus mark for earnings is pegged at 18 cents per share, indicating increase of 80% from the prior-year levels. The company’s earnings have surpassed the Zacks Consensus Estimate in three of the trailing four quarters, while missing in the remaining quarter, with the average earnings surprise of 17.69%.

The company reported adjusted earnings (excluding the impact of acquisition costs) of 6 cents per share, which declined 66.7% year over year in the last reported quarter. The figure, however, beat the Zacks Consensus Estimate of 4 cents per share. Revenues jumped 19% year over year to $18.7 million due to higher software and services revenues in the Clinical Pharmacology & Pharmacometrics (CPP), higher software revenues in the Cheminformatics business units and higher service sales in the Quantitative Systems Pharmacology (QSP) unit.

Factors to Note Ahead of SLP’s Q1 Earnings Release

Simulations Plus’ performance in the fiscal first quarter is likely to have benefited from solid momentum in the software business unit owing to healthy traction witnessed for GastroPlus, MonolixSuite and ADMet Predictor. 

SLP has been focused on supplementing its organic growth with strategic acquisitions. In June 2024, SLP made one of the most important acquisitions that of Pro-ficiency, which doubled its total addressable market to $8 billion and expanded market opportunity.  In the last reported quarter, the acquisition added $2.3 million to total revenues.  SLP also remains focused on expanding cross-selling opportunities to drive top-line growth.  

Service revenues are likely to have gained from steady growth in QSP and CPP business units. The company also continues to expand its global footprint by increasing presence in Europe, Asia and Latin America. In the last reported quarter, Services’ revenues improved 39% to $8.8 million, while QSP and CPP sales saw an increase of 32% and 28% year over year, respectively.

The Zacks Consensus Estimate for Software and Services’ revenues in the fiscal first quarter is pegged at $9.69 million and $8.89 million, respectively. 

However, relatively soft client funding and budget cycles, especially for biotech and pharmaceutical customers, remain concerning amid a volatile macroeconomic environment. SLP highlighted that first-quarter revenues are the lowest due to the seasonality of revenue streams.

What Our Model Says About SLP

Our proven model does not conclusively predict an earnings beat for SLP 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 #1. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around.

Wells Fargo & Company (WFC Quick QuoteWFC – Free Report) is set to announce quarterly figures on Jan. 15. WFC currently has an Earnings ESP of +4.23% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for WFC’s to-be-reported quarter’s earnings and revenues is pegged at $1.33 per share and $20.52 billion, respectively. Shares of WFC have risen 42.8% in the past year.

The Simply Good Foods Company (SMPL Quick QuoteSMPL – Free Report) presently has an Earnings ESP of +5.50% and a Zacks Rank #3. SMPL is slated to release quarterly numbers on Jan. 8. The Zacks Consensus Estimate for SMPL’s to-be-reported quarter’s earnings and revenues is pegged at 46 cents per share and $348.1 million, respectively. 

Acuity Brands, Inc. (AYI Quick QuoteAYI – Free Report) currently has an Earnings ESP of +0.16% and a Zacks Rank #3. AYI is scheduled to report quarterly earnings on Jan. 8. The Zacks Consensus Estimate for AYI’s to-be-reported quarter’s earnings and revenues is pegged at $3.88 per share and $951.9 million, respectively. Shares of AYI have surged 47.5% in the past year.