7/19/2013 11:32:39 AM
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New York,NY - On July 18, 2013, Taglich Brothers released an updated research report on Simulations Plus, Inc. (SLP) and reiterated a Speculative Buy rating with the 12-month price target increasing to $5.80 from $5.45 per share due to expanded industry multiples. 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™ in FY13, and development of a new chemical entity molecular library could underlie further revenue upside into FY14.
- 3Q13 profit (reported 7/11/13) was $993,000 or $0.06 per share, up from $869,300 or $0.05 per share, on an 11.7% sales increase to $3.1 million. 3Q13 results were in line with our projections. Net income was up due to gross margin increase to 85.4% from 84.2% in 3Q12 and flat operating versus the year-ago period.
- We are maintaining our FY13 EPS projection of $0.18 per share on sales growth of 9.1% to $10. 3 million. Our sales forecast reflects 3Q13 results. Our sales growth forecast is offset by a reduction in our gross margin projection to 83.9% from 84%.
- We are maintaining our FY13 EPS projection of $0.18 per share on sales of $10.4 million (up $100,000). The increase in sales reflects 2Q13 results. Offsetting the increase in our sales forecast is a reduction in our gross margin projection to 84% from 84.8%.
- We are maintaining our FY14 EPS projection of $0.23 per share on 12.2% sales growth to $11.6 million. We anticipate a price increase on software offerings, traction gains by MembranePlus, and a total of 70 (new) customers, up from 65 in FY13 and 59 in FY12.
The full report can be viewed at http://www.taglichbrothers.com/equityuniverse/companies/simplus/simplus.aspx.
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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.
Taglich Brothers, Inc. is full-service broker dealer focused exclusively on microcap companies. The Company defines the microcap segment of the equity market as companies with less than $250 million in market capitalization. Taglich Brothers currently offers institutional and retail brokerage services, investment banking and comprehensive research coverage to the investment community.
The Taglich Brothers' Equity Research department is dedicated to providing research reports that are informative, insightful and illuminating. Reports are designed to distill volumes of investment information into a concise, straightforward format so that busy professional investors can make informed investment decisions.
The information and statistical data contained herein have been obtained from sources, which we believe to be reliable but in no way are warranted by us as to accuracy or completeness. We do not undertake to advise you as to changes in figures or our views. This is not a solicitation of any order to buy or sell. Taglich Brothers, Inc. is fully disclosed with its clearing firm, Pershing, LLC, is not a market maker and does not sell to or buy from customers on a principal basis. The above statements are the opinion of Taglich Brothers, Inc. and are not a guarantee that the target price for the stock will be met or that predicted business results for the company will occur. There may be instances when fundamental, technical and quantitative opinions contained in the reports are not in concert. We, our affiliates, any officer, director or stockholder or any member of their families may from time to time purchase or sell any of the above-mentioned or related securities. Analysts and members of the Research Department are prohibited from buying or selling securities issued by the companies that Taglich Brothers, Inc. has a research relationship with, except if ownership of such securities was prior to the start of such relationship, then an Analyst or member of the Research Department may sell such securities after obtaining expressed written permission from Compliance. All research issued by Taglich Brothers, Inc. is based on public information. Taglich Brothers, Inc. does not currently have an Investment Banking relationship with the company mentioned and was not a manager or co-manager of any offering for the company within the last three years. The company paid for the first year of distribution a fee of $21,000 (USD) on May 2004, and since August 2005 pays a monthly monetary fee of $1,750 (USD) to Taglich Brothers, Inc. for the creation and dissemination of research reports. For further information and Taglich Brothers, Inc. ownership data please refer to each individual report.
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