Simulations Plus, Inc. (SLP) Research Update Released
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New York,NY - January 20, 2014 (www.investorideas.com newswire) On January 17, 2014, Taglich Brothers released an updated research report on Simulations Plus, Inc. (SLP) and reiterated a Speculative Buy rating with a 12-month price target of $6.10 per share. The report noted the following key investment considerations:
Increasing use of software tools and analytics for drug discovery and development is driving SLP’s growth.
The biosimulation (model-based prediction) technology market is projected to grow 18.5% annually, reaching $1.2 billion in 2017, up from $432 million in 2011.
SLP has penetrated only 15% of the 1,000+ potential pharmaceutical and biotechnology customers, leaving ample revenue upside. Toxicology products, release of MembranePlus™ by June 30, 2014, and development of a new chemical entity molecular library could underlie further revenue upside into FY15.
1Q14 profit (reported 1/9/14) was $685,000 or $0.04 per share, up from $587,000 or $0.04 per share, on a 15.3% sales increase to $2.6 million. 1Q14 results were slightly above our projections. 1Q14 results were up due to a $435,000 increase in software license revenues, partly offset by a $58,000 decline in revenue from studies and collaborations.
We maintain our FY14 EPS projection of $0.20 per share on sales growth of 11.7% to $11.3 million. Our sales forecast reflects a 2H14 price increase and release of MembranePlus launch.
In FY15 we project EPS of $0.23 per share on 14.2% sales growth to $12.8 million. Sales growth should accelerate due to a complete year of higher selling prices, revenue from MembranePlus, and 87 new customers, up from 74 in FY14 and 61 in FY13.
Simulations Plus, Inc., based in Lancaster, California, is a developer of drug discovery and development software, which is licensed to and used in drug research by major pharmaceutical and biotechnology companies worldwide.
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