Shares of Simulations Plus (SLP), a leading provider of biosimulation and intelligence solutions for the biopharma industry, plummeted 10.51% in pre-market trading on Thursday. The sharp decline comes in the wake of the company's significant downward revision of its fiscal 2025 revenue forecast and a lowered price target from an analyst firm.

Simulations Plus announced that it now expects fiscal 2025 revenue to be between $76 million and $80 million, a substantial reduction from its previous outlook of $90 million to $93 million. This new guidance falls well short of the $90.3 million consensus estimate from analysts surveyed by FactSet. Additionally, the company projected its fiscal Q3 revenue to fall between $19 million and $20 million, considerably below the $22.8 million analyst expectation. This drastic cut in revenue expectations has clearly shaken investor confidence, leading to the pre-market sell-off.

Adding to the bearish sentiment, Stephens, a prominent financial services firm, lowered its price target on Simulations Plus from $42 to $28. Despite maintaining an Overweight rating on the stock, this significant reduction in the price target suggests concerns about the company's near-term growth prospects. The combination of reduced revenue guidance and the lowered price target has created a perfect storm, driving the stock's pre-market plunge as investors reassess their positions in light of these developments.