Simulations Plus Is High-Growth Investment Opportunity In The Wake Of Immunetrics Acquisition: Analyst

Oppenheimer analyst Francois Brisebois reiterated an Outperform rating on the shares of Simulations Plus, Inc. SLP, raising the price target to $67 from $65.

The analyst sees SLP as an attractive vehicle for investors seeking exposure to the biotech innovation themes and data growth waves.

Simulations Plus announced the acquisition of Immunetrics. Given SLP's successful and disciplined M&A history, the analyst expects the investment as a "real positive" as it should strengthen its quantitative systems pharmacology offering (QSP).

Immunetrics is a modeling and simulation company focused on accelerating drug development in oncology, immunology, and autoimmune diseases, areas that are among the fastest-growing therapeutics.

The acquisition offers an upside to Oppenheimer's estimates, the analyst notes. 

In addition, Brisebois expects immediate synergy and accretion (similar to the Lixoft acquisition). Given that FY3Q is imminent, the analyst anticipates additional guidance about this inorganic growth (revenue and software: services mix). 

The analyst forecasts more acquisitions, given the company's continued strong cash position ($115.3 million as of end of FY2Q23: February).

Price Action: SLP shares are trading higher by 3.3% to $48.19 on the last check Wednesday.