Simulations Plus (NASDAQ:SLP) vs. Pareteum (NASDAQ:TEUM) Head to Head Review

Simulations Plus (NASDAQ:SLP) and Pareteum (NASDAQ:TEUM) are both small-cap computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, dividends, valuation, institutional ownership, earnings, profitability and risk.

Insider and Institutional Ownership

41.2% of Simulations Plus shares are owned by institutional investors. Comparatively, 21.9% of Pareteum shares are owned by institutional investors. 31.6% of Simulations Plus shares are owned by company insiders. Comparatively, 4.0% of Pareteum shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Simulations Plus has a beta of -0.35, meaning that its stock price is 135% less volatile than the S&P 500. Comparatively, Pareteum has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500.

Analyst Recommendations

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Simulations Plus 0 1 0 0 2.00
Pareteum 0 0 4 0 3.00

Pareteum has a consensus target price of $7.00, suggesting a potential upside of 128.76%. Given Pareteum’s stronger consensus rating and higher possible upside, analysts plainly believe Pareteum is more favorable than Simulations Plus.

Profitability

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

Net Margins Return on Equity Return on Assets
Simulations Plus 24.09% 23.48% 18.07%
Pareteum -23.68% -1.66% -1.21%

Dividends

Simulations Plus pays an annual dividend of $0.24 per share and has a dividend yield of 0.6%. Pareteum does not pay a dividend. Simulations Plus pays out 48.0% of its earnings in the form of a dividend. Simulations Plus has increased its dividend for 2 consecutive years.

Valuation and Earnings

This table compares Simulations Plus and Pareteum’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Simulations Plus $29.67 million 22.15 $8.93 million $0.50 74.98
Pareteum $32.44 million 10.56 -$12.98 million $0.09 34.00

Simulations Plus has higher earnings, but lower revenue than Pareteum. Pareteum 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 Pareteum on 11 of the 17 factors compared between the two stocks.

Simulations Plus Company Profile

Simulations Plus, Inc. develops drug discovery and development software for mechanistic modeling and simulation, and machine-learning-based prediction of properties of molecules from their structure worldwide. The company offers GastroPlus, which simulates the absorption, pharmacokinetics (PK), pharmacodynamics, and drug-drug interactions of compounds administered to humans and animals; DDDPlus that simulates in vitro laboratory experiments that measure the rate of dissolution of the drug and additives in a dosage form; and MembranePlus, which simulates laboratory experiments. It also provides PKPlus, a standalone program that provides the functionality needed by pharmaceutical industry scientists to perform the analyses and generate the outputs needed to satisfy regulatory agency requirements for NCA and compartmental PK modelling; ADMET Predictor, a chemistry-based computer program that takes molecular structures as inputs and predicts their properties; and MedChem Designer, a molecule drawing program or sketcher. In addition, it offers MedChem Studio, a software tool for data mining and designing new molecules; KIWI, a cloud-based Web application to organizes, processes, maintains, and communicates the volume of data and results generated by pharmacologists and scientists over the duration of a drug development program; DILIsym, a quantitative systems pharmacology software; NAFLDsym, a simulation program for analyzing nonalcoholic fatty liver disease; and RENAsym for investigating and predicting drug-induced or acute kidney injury. Further, the company provides population modeling and simulation contract research services for the pharmaceutical and biotechnology industries; and clinical-pharmacology-based consulting services in support of regulatory submissions. It sells its pharmaceutical/chemistry software to pharmaceutical, biotechnology, agrochemical, cosmetics, and food companies. The company was founded in 1996 and is headquartered in Lancaster, California.

Pareteum Company Profile

Pareteum Corporation operates a communications cloud services platform in Europe and internationally. Its platform provides mobility, messaging, and security services and applications, with a single-sign-on, application program interface (API), and software development suite. The company's platform hosts integrated IT/back office and core network functionality for mobile network operators, as well as for enterprises to implement and leverage mobile communications solutions on a Software as a Service (Saas), PaaS, or IaaS basis. It also offers operational support system for channel partners with APIs for integration with third party systems, workflows for complex application orchestration, and customer support with branded portals and plug-ins for various other applications. In addition, the company provides software solutions, which layer over disparate fixed, mobile, and IP networks to enable the deployment of converged communication services and applications for enterprise communications and core telecommunications markets; and Wi-Fi access on mobile devices through its SaaS platform. Pareteum Corporation serves the markets of Internet of Things, mobile virtual network operators, smart cities, and application developers. The company was formerly known as Elephant Talk Communications Corp. and changed its name to Pareteum Corporation in November 2016. Pareteum Corporation is based in New York, New York.

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