Craig-Hallum remains bullish on Simulations Plus following quarterly results

Craig-Hallum analyst Matt Hewitt notes Simulations Plus’ Q3 sales exceeded consensus expectations, while earnings were ahead of the firm’s estimate but in-line with the Street. Craig-Hallum says last night’s call highlighted several key factors why it believes growth investors should own this stock, including double digit revenue growth, an improving macro environment which should enable that to continue, a recent acquisition that doubles the TAM to $8B and increasing contribution from AI. Separately, the company announced its decision to discontinue its quarterly dividend, reallocating funds back into the business to generate greater shareholder value via growth initiatives. The firm supports this decision, especially since the yield has become insignificant and opportunities for investment should provide better returns. Craig-Hallum reiterates a Buy rating on the shares with a price target of $56.