Simulations Plus Inc: Investor Crisis Intensifies Amid Allegations of Misleading Disclosures

Simulations Plus Inc. (NASDAQ: SLP), a health‑care technology firm specializing in drug‑discovery simulation software, is once again thrust into the spotlight, this time as the focus of a potential class action lawsuit. The Rosen Law Firm, a prominent investor‑rights group, has announced it will pursue a securities claim on behalf of shareholders alleging that SLP has issued materially misleading information to the investing public. The alleged misstatements stem from the company’s third‑quarter 2025 earnings report and a subsequent market‑reaction analysis that prompted a sharp 25.75 % decline in the stock on July 15 , 2025.

1. The Core of the Allegation

According to the Rosen Law Firm’s statement (dated January 19 , 2026), the allegations are rooted in a July 15 , 2025 article published by Benzinga titled “Simulations Plus Sees Weaker Demand Persist, Outlook Softens.” The article noted that the company reported sales of $20.4 million, a 10 % year‑over‑year increase, but that figure fell short of the consensus estimate of $20.9 million. It further highlighted that the company’s preliminary third‑quarter sales—released in June—had already missed expectations, ranging from $19 million to $20 million versus the consensus of $22.78 million. The discrepancy between the published numbers and the market’s expectations is what Rosen alleges constitutes a material misstatement that misled investors.

2. Market Impact and Investor Sentiment

The impact of the July 15 , 2025 earnings miss was immediate and severe. SLP’s share price plunged 25.75 % that day, dragging the company’s valuation down from its 52‑week high of $37.67 (February 13 , 2025) to a low of $12.39 (July 17 , 2025). The latest close on January 15 , 2026 sits at $20.54, a level that underscores the lingering volatility and uncertainty that investors face. With a price‑to‑earnings ratio of –6.29, the company remains deeply unprofitable, further eroding confidence among shareholders.

Rosen Law Firm is actively preparing a class action to seek recovery of investor losses. The firm asserts that shareholders who purchased SLP securities may be entitled to compensation without incurring any out‑of‑pocket fees or costs, through a contingency‑fee arrangement. Interested parties can join the prospective class action by visiting the firm’s online portal (https://rosenlegal.com/submit-form/?case_id=42476 ) or by contacting Phillip Kim, Esq. at toll‑free 866‑767‑3653 or case@rosenlegal.com . This legal pathway offers an avenue for investors to challenge what they perceive as a breach of fiduciary duty by SLP’s management.

4. Corporate Context and Forward‑Looking Statements

Simulations Plus was founded in Lancaster, United States, and went public on June 18, 1997. The company’s business model revolves around licensing simulation software to pharmaceutical firms worldwide, providing tools that streamline drug discovery and development. While the company has historically benefited from a niche market, recent financial results reveal a plateauing demand for its services. The company’s website, www.simulations-plus.com , remains an information hub but has yet to articulate a clear strategy to reverse the downward trend in earnings and restore investor confidence.

5. Critical Assessment

From a critical standpoint, the allegations presented by Rosen Law Firm raise serious questions about the transparency and integrity of Simulations Plus’ financial disclosures. The 10 % shortfall in reported sales relative to consensus, coupled with the sharp market decline, suggests that the company may have been over‑optimistic about its performance metrics. Investors, particularly those who relied on the company’s stated growth trajectory, are now forced to confront the possibility that the company’s public statements were not fully accurate or were intentionally misleading.

The market’s reaction—manifested in a 25.75 % drop and a prolonged period of low trading—underscores the severity of the situation. Even with the potential for a class action to recoup losses, the damage to the company’s reputation and the erosion of its market valuation may prove irreversible in the short term.

6. Conclusion

Simulations Plus Inc. is at a crossroads. The company’s core technology remains valuable to the pharmaceutical industry, yet its financial performance and disclosure practices are under intense scrutiny. Shareholders are urged to stay informed, assess the risk of holding SLP stock, and consider the implications of the ongoing legal proceedings. The outcome of the Rosen Law Firm’s proposed class action could set a precedent for how simulation‑technology firms manage investor relations and disclosure obligations in the future.