SLP
Simulations Plus, Inc.
$18.34
Platform & Compounding FCF
85%
Two-stage FCF DCF
Mild
·
Conviction
Overvalued
Trading 7.9% above fair value
You pay
$18.34
Bear
$12.05
Fair
$17.00
Bull
$22.26
Bear
$12.05
-34.3%
8% stage 1 growth, 12% discount
Fair
$17.00
-7.3%
13% stage 1 growth, 12% discount
Bull
$22.26
+21.4%
17% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (13% base case)
Terminal Value % of EV
37%
Implied Market Multiple
26.8x
Market is pricing in (growth)
14.8%
vs 13.4% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $18.50 from 9 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $17.00 per share.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions