Is Simulations Plus, Inc. overvalued or undervalued?

As of 14 July 2025, the valuation grade for Simulations Plus, Inc. has moved from very expensive to risky, indicating a shift in perception regarding its market value. The company appears to be overvalued, as evidenced by a P/E ratio of 107, which significantly exceeds the peer average, and an EV to EBITDA ratio of 44.51, suggesting that investors are paying a premium for earnings before interest, taxes, depreciation, and amortization. Additionally, the Price to Book Value stands at 2.92, further highlighting the disparity between the company's market price and its book value.
In comparison to its peers, Simulations Plus, Inc. has a P/E ratio of 22.90, while Everbridge, Inc. shows a negative P/E of -28.60, and Definitive Healthcare Corp. has a P/E of 8.68, indicating that Simulations Plus is trading at a higher valuation despite its underperformance. The company's recent stock performance has been poor, with a year-to-date return of -43.13%, significantly lagging behind the S&P 500's return of 12.22% in the same period, which reinforces the notion of overvaluation.