Comparing Smith Micro Software (NASDAQ:SMSI) & Simulations Plus (NASDAQ:SLP)

Smith Micro Software (NASDAQ:SMSI) and Simulations Plus (NASDAQ:SLP) are both small-cap computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, analyst recommendations and earnings.

Risk and Volatility

Smith Micro Software has a beta of 0.49, suggesting that its share price is 51% less volatile than the S&P 500. Comparatively, Simulations Plus has a beta of 1.19, suggesting that its share price is 19% more volatile than the S&P 500.

Institutional and Insider Ownership

20.8% of Smith Micro Software shares are owned by institutional investors. Comparatively, 78.1% of Simulations Plus shares are owned by institutional investors. 29.8% of Smith Micro Software shares are owned by company insiders. Comparatively, 19.1% of Simulations Plus shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Smith Micro Software and Simulations Plus’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Smith Micro Software	-168.92%	-52.96%	-41.19%
Simulations Plus	-77.96%	16.21%	15.00%

Analyst Recommendations

This is a summary of recent recommendations and price targets for Smith Micro Software and Simulations Plus, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Smith Micro Software	1	0	0	0	1.00
Simulations Plus	1	6	3	0	2.20

Simulations Plus has a consensus price target of $24.40, indicating a potential upside of 69.80%. Given Simulations Plus’ stronger consensus rating and higher possible upside, analysts plainly believe Simulations Plus is more favorable than Smith Micro Software.

Valuation and Earnings

This table compares Smith Micro Software and Simulations Plus”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Smith Micro Software	$17.36 million	1.06	-$29.33 million	($1.51)	-0.47
Simulations Plus	$80.54 million	3.61	-$64.72 million	($3.13)	-4.59

Smith Micro Software has higher earnings, but lower revenue than Simulations Plus. Simulations Plus is trading at a lower price-to-earnings ratio than Smith Micro Software, indicating that it is currently the more affordable of the two stocks.

Summary

Simulations Plus beats Smith Micro Software on 10 of the 14 factors compared between the two stocks.

About Smith Micro Software

Smith Micro Software, Inc. engages in the development and sale of software to enhance the mobile experience to wireless and cable service providers in the Americas, Europe, the Middle East, and Africa. The company offers SafePath Family, SafePath IoT, SafePath Home, and SafePath Premium product suite, which provides tools to protect digital lifestyles and manage connected devices inside and outside the home; and CommSuite, a messaging platform that helps mobile service provides deliver a next-generation voicemail experience to mobile subscribers, as well as enables multi-language voice-to-text (VTT) transcription messaging. It also offers ViewSpot, a retail display management platform that provides on-screen and interactive demos to wireless carriers and other smartphone retailers; and technical support and customer services. Smith Micro Software, Inc. was founded in 1982 and is headquartered in Pittsburgh, Pennsylvania.

About Simulations Plus

Simulations Plus, Inc. develops drug discovery and development software for modeling and simulation, and prediction of molecular properties utilizing artificial intelligence and machine learning based technology worldwide. The company operates through two segments, Software and Services. It offers GastroPlus, which simulates the absorption and drug interaction of compounds administered to humans and animals; and DDDPlus and MembranePlus simulation products. The company also provides products based on mechanistic and mathematical models, such as DILIsym, NAFLDsym, ILDsym, RENAsym, IPFsym, and MITOsym products. In addition, it offers Absorption, Distribution, Metabolism, Excretion, and Toxicity Predictor for chemistry-based computer program that takes molecular structures as inputs and predicts their properties; and MedChem Designer, as well as MonolixSuite products for modeling and simulation that allows for population analyses, rapid clinical trial data analyses, and regulatory submissions. Further, the company provides clinical-pharmacology-based consulting services, which includes population pharmacokinetic and pharmacodynamic modeling, exposure-response analyses, clinical trial simulations, data programming, and technical writing services in support of regulatory submissions; and early drug discovery services. Additionally, it offers creative and insightful consulting services to support its quantitative systems pharmacology/quantitative systems toxicology modelling. The company serves pharmaceutical, biotechnology, agrochemical, cosmetics, and food industry companies, as well as academic and regulatory agencies. Simulations Plus, Inc. was incorporated in 1996 and is headquartered in Lancaster, California.