Back to top

Image: Bigstock

Simulations Plus (SLP) Announces $20M Accelerated Buyback Plan

Read MoreHide Full Article

Simulations Plus (SLP - Free Report) recently announced that it has inked an accelerated share repurchase (ASR) agreement with Morgan Stanley & Co. LLC. to buy back its common stock worth $20 million. The ASR will be funded by using the available cash balances.

According to the ASR agreement, Simulations Plus will pay initially $20 million to Morgan Stanley and will receive an initial share delivery of nearly 409,000 shares. The final settlement (inclusive of any additional share delivery) is expected to occur during or before the third quarter of fiscal 2023, added Simulations Plus.

The ASR is a part of the company’s earlier announced (December 2022) $50 million share repurchase authorization. Following the execution of ASR, the company will have $30 million worth shares left under its existing buyback program.

 

Headquartered in Lancaster, CA, Simulations Plus develops drug discovery and development simulation software, which is licensed to and used in the conduct of drug research by major pharmaceutical and biotechnology companies worldwide.

The company recently reported first-quarter fiscal 2023 results wherein earnings of 6 cents per share, declined 60% on a year-over-year basis. The figure missed the Zacks Consensus Estimate by 50%.

Revenues of $12 million decreased 4% year over year, affected by lower revenues in Software business segment. The top line missed the Zacks Consensus Estimate by 3.8%. Revenues from Software (51% of the total quarterly revenues) declined 17% year over year to $6.1 million due to changes in renewal pattern and shift in revenue seasonality.

However, Services’ revenues (49% of total quarterly revenues) improved 17% to $5.9 million. Services’ backlog was $16 million at the end of the reported quarter, up 6.7% year over year.

For fiscal 2023, SLP expects revenue growth of 10-15% year over year and in the range of $59.3-$62 million. For the fiscal year, the company expects Software to consist 60-65% of revenues and Services to consist 35-40% of revenues. The company expects earnings per share to increase in the band of 5-10%.

Currently, SLP carries a Zacks Rank #3 (Hold). Shares of the company have declined 16.5% compared with sub-industry’s decline of 24.1%.

Zacks Investment Research
Image Source: Zacks Investment Research

Stocks to Consider

Some better-ranked stocks from the broader technology space are Arista Networks (ANET - Free Report) , Jabil (JBL - Free Report) and Asure Software (ASUR - Free Report) . While Arista and Jabil sport a Zacks Rank #1 (Strong Buy), Asure carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Arista Networks’ 2022 earnings is pegged at $4.37 per share, up 0.5% in the past 60 days. The long-term earnings growth rate is anticipated to be 17.5%.

Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 12.7%. Shares of ANET have declined 11.3% in the past year.

The Zacks Consensus Estimate for Jabil’s 2023 earnings is pegged at $8.31 per share, rising 1.6% in the past 60 days. The long-term earnings growth rate is anticipated to be 12%.

Jabil’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 8.8%. Shares of JBL are up 7.2% in the past year.

The Zacks Consensus Estimate for Asure Software’s 2022 earnings is pegged at 7 cents per share, unchanged in the past 60 days. The long-term earnings growth rate is anticipated to be 23%.

Asure Software’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 83.3%. Shares of ASUR have soared 38.7% in the past year.

Published in