SLP Should I Buy
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Simulations Plus Inc (SLP) is not a strong buy at the moment for a beginner, long-term investor with $50,000-$100,000 available. The stock is currently in a bearish technical trend, with insider selling, legal investigations, and muted growth outlooks presenting significant risks. While there are some positive financial metrics, the overall sentiment and market conditions do not support a confident long-term investment at this time.
The stock is in a bearish trend with MACD histogram at -0.59 (negatively expanding), RSI at 8.208 (oversold), and bearish moving averages (SMA_200 > SMA_20 > SMA_5). Key support levels are at S1: 12.584 and S2: 11.279, indicating further downside risk.
The company has extended its agreement with the FDA to develop AI models for chemical safety assessments, which could enhance its reputation and long-term growth prospects.
Rosen Law Firm is investigating potential securities claims against the company, raising concerns about transparency and legal liabilities. Insider selling has increased by 2417.79% over the last month, signaling lack of confidence from within the company. Analysts have downgraded the stock, citing muted growth outlook and disappointing financial performance.
In 2026/Q1, revenue dropped by -2.66% YoY to $18.42M. However, net income increased significantly by 228.16% YoY to $676K, and EPS rose by 200% YoY to 0.03. Gross margin improved to 66.79%, up 23.71% YoY, indicating better cost management despite declining revenues.
Analyst sentiment is mixed. TD Cowen raised the price target to $19 from $16 but maintained a Hold rating, citing a cautious outlook for 2026. BTIG downgraded the stock to Neutral from Buy, highlighting demand softness, limited visibility on recovery, and multiple headwinds for 2026.
