Head-To-Head Survey: Simulations Plus (NASDAQ:SLP) and Codexis (NASDAQ:CDXS)

Codexis (NASDAQ:CDXS) and Simulations Plus (NASDAQ:SLP) are both small-cap healthcare companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, earnings, profitability, dividends, risk, institutional ownership and analyst recommendations.

Risk and Volatility

Codexis has a beta of 2.55, meaning that its share price is 155% more volatile than the S&P 500. Comparatively, Simulations Plus has a beta of 1.31, meaning that its share price is 31% more volatile than the S&P 500.

Institutional & Insider Ownership

78.5% of Codexis shares are held by institutional investors. Comparatively, 78.1% of Simulations Plus shares are held by institutional investors. 3.5% of Codexis shares are held by company insiders. Comparatively, 19.1% of Simulations Plus shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Codexis and Simulations Plus’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Codexis	-39.55%	-74.36%	-23.58%
Simulations Plus	9.88%	13.50%	12.45%

Analyst Recommendations

This is a breakdown of recent ratings for Codexis and Simulations Plus, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Codexis	1	1	2	0	2.25
Simulations Plus	1	7	0	0	1.88

Codexis currently has a consensus target price of $6.50, indicating a potential upside of 360.99%. Simulations Plus has a consensus target price of $17.25, indicating a potential downside of 6.76%. Given Codexis’ stronger consensus rating and higher possible upside, equities analysts plainly believe Codexis is more favorable than Simulations Plus.

Valuation & Earnings

This table compares Codexis and Simulations Plus”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Codexis	$70.39 million	2.19	-$43.97 million	($0.34)	-4.15
Simulations Plus	$82.06 million	4.56	-$64.72 million	$0.40	46.25

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

Summary

Simulations Plus beats Codexis on 8 of the 14 factors compared between the two stocks.

About Codexis

Codexis, Inc. discovers, develops, and sells enzymes and other proteins. The company operates through two segments, Performance Enzymes and Novel Biotherapeutics. It offers biocatalyst products and services. The company also provides biocatalyst screening and protein engineering services. In addition, it offers CodeEvolver, a technology platform, which helps in developing and delivering biocatalysts that perform chemical transformations and enhance the efficiency and productivity of manufacturing processes. The company's platform is also used for molecular biology and in vitro diagnostic enzymes. It has a collaboration agreement with Nestlé Health Science to develop CDX-7108 for the treatment of exocrine pancreatic insufficiency. The company sells its products to pharmaceutical manufacturers through its direct sales and business development force in the United States and Europe. The company was incorporated in 2002 and is headquartered in Redwood City, California.

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.