Head-To-Head Contrast: Neonode (NASDAQ:NEON) & Simulations Plus (NASDAQ:SLP)

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

Volatility and Risk

Simulations Plus has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500. Comparatively, Neonode has a beta of 0.51, suggesting that its share price is 49% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Simulations Plus	-78.63%	11.62%	10.84%
Neonode	-241.38%	-40.64%	-35.78%

Institutional & Insider Ownership

78.1% of Simulations Plus shares are owned by institutional investors. Comparatively, 11.6% of Neonode shares are owned by institutional investors. 19.4% of Simulations Plus shares are owned by insiders. Comparatively, 23.9% of Neonode shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Simulations Plus and Neonode”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Simulations Plus	$80.38 million	4.35	$9.95 million	($3.15)	-5.52
Neonode	$2.20 million	17.53	-$6.47 million	($0.32)	-7.17

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

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Simulations Plus	1	5	4	1	2.45
Neonode	1	1	0	0	1.50

Simulations Plus presently has a consensus target price of $24.40, indicating a potential upside of 40.39%. Neonode has a consensus target price of $6.00, indicating a potential upside of 161.44%. Given Neonode’s higher probable upside, analysts clearly believe Neonode is more favorable than Simulations Plus.

Summary

Simulations Plus beats Neonode on 11 of the 15 factors compared between the two stocks.

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.

About Neonode

Neonode Inc., together with its subsidiaries, develops optical sensing solutions for contactless touch, touch, and gesture sensing in the United States, Japan, South Korea, Germany, Switzerland, France, Sweden, China, and internationally. It also offers software solutions for machine perception to detect and track persons and objects in video streams from cameras and other types of imagers. In addition, the company sells touch sensor modules to OEMs, original design manufacturers, and systems integrators. Further, it licenses its zForce technology to original equipment manufacturers and automotive Tier 1 suppliers, as well as provides non-recurring engineering services related to application development. It serves office equipment, automotive, industrial automation, medical, military, and avionics markets. Neonode Inc. was incorporated in 1997 and is headquartered in Stockholm, Sweden.