Benzinga | Jul 13, 2021 02:00PM EDT

Simulations Plus Target Price Lowered At Craig-Hallum, Raymond James After Q3 Sales Miss Expectations

* Craig-Hallum analyst Matt Hewitt lowered the Simulations Plus Inc (NASDAQ:SLP) price target to $65 from $74 and kept a Hold rating on the stock.

* Unfortunately, while software sales remain robust, the company's consulting business was hit by a staggering nine delays, holds, or cancellations, which were not attributable to any one particular cause, Hewitt notes.

* Given the revenue miss and the reduction in estimates, Hewitt expects the stock to be weak in the days/weeks to come.

* Raymond James lowered its price target to $54 from $95, citing limited visibility on growth expectations for FY2022." The firm made no change to its Outperform rating.

* Management decided to wait for additional clarity around business trends before providing FY22 guidance but expects that the disruption in Service projects could continue at least through 4Q21, analyst Dane Leone tells investors in a research note.

* Monday after hours, Simulations Plus reported 3Q revenue of $12.8 million, up 4% but missed analyst expectations of $14.7 million.

* Revenue in the software business increased 21% as product updates and cross-selling initiatives accelerated growth rates.

* The delays in services projects will impact the growth rates for the remainder of the fiscal year, and the company now sees full-year revenue growth of 5% to 10%. The prior full-year growth target was 15% to 20%.

* The company also declared a dividend of $0.06 per share payable on August 2, record data as of July 26.

* Price Action: SLP shares are down 14.2% at $45.83 during the market session on the last check Tuesday.