March 7, 2024
Top 10 Stock Simulations Plus Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Simulations Plus – Top 10 Stock in SDG 3: Good Health and Well-being
Simulations Plus is listed as a top 10 stock on March 07, 2024 in the market index SDG 3 because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is safely financed and the professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° View of 63 (high 63% performer), Obermatt assesses an overall buy recommendation for Simulations Plus on March 07, 2024.
Snapshot: Obermatt Ranks
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Simulations Plus Buy
| 360 METRICS | March 7, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 37 |
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| GROWTH | ||||||||
| GROWTH | 34 |
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| SAFETY | ||||||||
| SAFETY | 100 |
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| SENTIMENT | ||||||||
| SENTIMENT | 94 |
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| 360° VIEW | ||||||||
| 360° VIEW | 63 |
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ANALYSIS: With an Obermatt 360° View of 63 (better than 63% compared with alternatives), overall professional sentiment and financial characteristics for the stock Simulations Plus are above average. The 360° View is based on consolidating four consolidated indicators, with half below and half above average for Simulations Plus. The consolidated Sentiment Rank has a good rank of 94, which means that professional investors are more optimistic about the stock than for 94% of alternative investment opportunities. It also rates well regarding its financing structure, with the consolidated Safety Rank at 100 or better than 100% of its peers when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the stock is expensive and expects low growth. The consolidated Value Rank is only 37, meaning that the share price of Simulations Plus is on the high side, compared with indicators such as revenues, profits, and invested capital. The company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth,and stock returns, with its Growth Rank at 34. ...read more
RECOMMENDATION: With a consolidated 360° View of 63, Simulations Plus is better positioned than 63% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, namely the positive professional market sentiment (Sentiment Rank of 94) and safe financing practices (Safety Rank of 100), the case for investing in this stock needs further thought. The Value and the Safety Ranks are below average. The Safety Rank is the least critical of the four consolidated ranks, because it only reflects financing practices. So the question is: How to assess below-average value against above-average sentiment? This may be a case where growth is in the future, not yet reflected in current performance. Companies that might fall into this category are those with intellectual property, such as technology and pharmaceutical companies. In early phases, they are expensive relative to their size and have a lot of capital on their books, as is the case here. Investors expect a better future and are willing to pay a higher price than is warranted by the current company size. These higher prices drive stock price value down in the short term. In this case, future growth may be the strongest driver of the investment case, reflected by institutional investors' opinions. With a weak Value Rank, the question is how much to sacrifice value at the cost of positive sentiment. Sometimes market sentiment is just hype, but sometimes it is right. You pay more than market-average for this stock, but it may be worth it, if the future of Simulations Pluṣ is bright. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more
Sentiment Strategy: Professional Market Sentiment for Simulations Plus very positive
ANALYSIS: With an Obermatt Sentiment Rank of 94 (better than 94% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Simulations Plus is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Simulations Plus. Analyst Opinions are at a rank of 97 (better than 97% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 50, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Simulations Plus. The Professional Investors rank is 61, which means that currently, professional investors hold more stock in this company than in 61% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 91 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 91% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 94 (more positive than 94% compared with investment alternatives), Simulations Plus has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Simulations Plus stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: Simulations Plus Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 37 (worse than 63% compared with alternatives), Simulations Plus shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Simulations Plus. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 85% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 9 which means that the stock price compared with what market professionals expect for future profits is higher than 91% of comparable companies, indicating a low value concerning Simulations Plus's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 29 which means that the stock price compared with what market professionals expect for future profit levels is higher than 71% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 4 is also low. Compared with invested capital, the stock price is higher than for 96% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 37, is a hold recommendation based on Simulations Plus's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Simulations Plus? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Simulations Plus only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Simulations Plus Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 34 (better than 34% compared with alternatives), Simulations Plus shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Simulations Plus. Sales Growth has a rank of 64, which means that, currently, professionals expect the company to grow more than 64% of its competitors. Profit Growth with a rank of 62 is also above average. But Capital Growth has only a rank of 25, and Stock Returns with 37 are also below-average. Stock returns for Simulations Plus have recently been below 63% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 34, is a hold recommendation for growth and momentum investors. Are investors forecasting troubles based on the lack of operating investment activity at the company? This could be one explanation as to why stock returns are low. But stock returns can also be the result of correcting an error in the past, in this case, an overly optimistic outlook on the future, which is now more realistic. The Value Ranks may confirm such a picture. The more important growth indicators are revenues and profits, which are both above average for Simulations Plus. This is a positive sign from the company's operational side and may give investors courage, despite the poor recent stock price performance. ...read more
Safety Strategy: Simulations Plus Debt Financing Safety very solid
| SAFETY METRICS | March 7, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 100 |
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| REFINANCING | ||||||||
| REFINANCING | 75 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 98 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 100 |
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ANALYSIS: With an Obermatt Safety Rank of 100 (better than 100% compared with alternatives) for 2023, the company Simulations Plus has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Simulations Plus is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, where all three are above average for Simulations Plus. Leverage is at 100, meaning the company has a below-average debt-to-equity ratio. It has less debt than 100% of its competitors. Refinancing is at a rank of 75, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 75% of its competitors. Finally, Liquidity is also good at a rank of 98, which means that the company generates more profit to service its debt than 98% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 100 (better than 100% compared with alternatives), Simulations Plus has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: Simulations Plus Above-Average Financial Performance
| COMBINED PERFORMANCE | March 7, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 37 |
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| GROWTH | ||||||||
| GROWTH | 34 |
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| SAFETY | ||||||||
| SAFETY | 98 |
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| COMBINED | ||||||||
| COMBINED | 74 |
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ANALYSIS: With an Obermatt Combined Rank of 74 (better than 74% compared with investment alternatives), Simulations Plus (Health Care Technology, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Simulations Plus are low in value (priced high) with a consolidated Value Rank of 37 (worse than 63% of alternatives) and show below-average growth (Growth Rank of 34) but are safely financed (Safety Rank of 100), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 74, is a buy recommendation based on Simulations Plus's financial characteristics. As the company Simulations Plus's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 37) and low growth (Obermatt Growth Rank of 34), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 100) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. ...read more
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