Simulations Plus Shares Drop Amid Legal and Financial Challenges; Optimism for AI Drives Rebound

Shares of

, Inc. (NASDAQ: SLP) have faced considerable volatility in recent months, influenced by disappointing earnings, ongoing legal probes, and changing analyst perspectives. The company, which specializes in biopharmaceutical modeling and simulation software, saw its stock value drop by more than 25% after its third-quarter 2025 results fell short of expectations. This triggered a series of lawsuits and heightened investor anxiety, as detailed in a .

The company posted third-quarter revenue of $20.4 million, marking a 10% increase from the prior year but still missing the consensus estimate of $20.9 million. Earlier guidance in June had already signaled weaker performance, with projected sales of $19–20 million compared to the $22.78 million analysts had anticipated. Following the earnings announcement, shares plunged 25.75% on July 15, 2025, leading to two separate securities class action investigations by the Rosen Law Firm and Bleichmar Fonti & Auld LLP, according to a

. Both legal teams claim that Simulations Plus provided inaccurate details regarding its financial condition and the integration of Pro-ficiency Holdings, a 2024 acquisition that was promoted as doubling the company’s addressable market.

Adding to its legal troubles, Simulations Plus disclosed in June 2025 that it had dismissed its auditor, Grant Thornton, due to unresolved disputes over segment reporting and internal controls, as reported in a

. The company also took a $77.2 million impairment charge related to previous acquisitions, further shaking investor confidence. Despite these setbacks, CEO Shawn O'Connor stated in a recent that the company still aims to achieve its revised 2025 targets and introduced a new AI-powered product strategy to enhance its cloud and simulation offerings.

The stock’s sharp movements have led to varied analyst opinions. Cowen began coverage with a "hold" rating in September 2025, while William Blair continued to rate the stock as "outperform." In contrast, KeyCorp lowered its rating to "sector weight" in July, citing increased market uncertainty. Meanwhile, Stephens Investment Management Group disclosed a new $4.69 million stake in

, according to a .

Simulations Plus is also contending with internal difficulties. Efforts to integrate Pro-ficiency, which offers simulation-based compliance solutions, have reportedly stumbled, with deficiencies in internal controls coming to light. These internal issues, combined with external factors such as drug pricing pressures and international tariffs, have created a challenging business environment.

Shareholders impacted by the decline in stock price are advised to seek legal advice. The Rosen Law Firm, which has recovered hundreds of millions for investors in the past, is looking to lead a class action. BFA Law is also investigating potential securities fraud related to the Pro-ficiency deal and alleged misstatements in financial disclosures.

With the company set to announce its full-year 2025 results on December 1, 2025, the outlook remains unclear. Fiscal 2026 revenue is projected between $79 million and $82 million, representing a modest 0–4% growth, as Simulations Plus works to regain the confidence of its stakeholders in a difficult market.