September 22, 2015

On Simulations Plus

The Street had a small write up on Simulations Plus:

  • LP's very impressive revenue growth exceeded the industry average of 35.6%. Since the same quarter one year prior, revenues leaped by 58.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • SLP has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 6.61, which clearly demonstrates the ability to cover short-term cash needs.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The gross profit margin for SIMULATIONS PLUS INC is currently very high, coming in at 88.34%. It has increased significantly from the same period last year. Along with this, the net profit margin of 31.18% significantly outperformed against the industry average.
  • Net operating cash flow has increased to $2.14 million or 26.78% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -22.35%.
The company only has a market cap of 153 million and pays a small dividend as well.  

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