Certara (CERT) AI Stock Analysis

• Market Cap: $1.32B
• Dividend Yield: N/A
• Average Volume (3M): 2.23M
• Price to Earnings (P/E): 123.0
• Beta (1Y): 1.56
• Revenue Growth: 11.47%
• EPS Growth: N/A
• Country: US
• Employees: 1,487
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Healthcare Information Services
• EPS (TTM): 0.14
• Shares Outstanding: 159,273,360
• 10 Day Avg. Volume: 3,586,205
• 30 Day Avg. Volume: 2,233,860
• PEG Ratio: 1.80
• Price to Book (P/B): 1.61
• Price to Sales (P/S): 4.44
• P/FCF Ratio: 21.67
• Enterprise Value/Market Cap: 1.59
• Enterprise Value/Revenue: 5.05
• Enterprise Value/Gross Profit: 8.69
• Enterprise Value/Ebitda: 19.67
• 1Y Price Target: $13.25
• Price Target Upside: 65.01% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10
• EPS Forecast (FY): 0.45
• Revenue Forecast (FY): $418.45M

• Rating: 58 Neutral
• Price Target: $11.50 ▲(43.21% Upside)

Certara's overall stock score reflects a solid financial foundation and strong software segment growth, but is tempered by technical weakness and high valuation concerns. The mixed sentiment from the earnings call, with both positive product developments and challenges in bookings, further influences the score. The stock may appeal to investors focused on growth potential, but caution is advised due to current market sentiment and valuation.

Positive Factors

Software Segment Growth

The strong growth in the software segment indicates robust demand for Certara's core products, enhancing its market position and supporting long-term revenue stability.

Cash Flow Management

Effective cash flow management ensures Certara can reinvest in growth opportunities and maintain financial flexibility, supporting sustainable business operations.

New Product Launches

The introduction of new products with positive feedback positions Certara to capture more market share and drive future growth through innovation.

Negative Factors

Services Segment Challenges

Challenges in the services segment, driven by customer hesitancy, could hinder revenue growth and require strategic adjustments to regain momentum.

Bookings Growth Below Expectations

Slower bookings growth reflects cautious spending by key customers, potentially impacting future revenue and necessitating strategic realignment.

Regulatory Services Performance

Declining performance in regulatory services may affect Certara's consulting revenue, requiring a strategic review to address market challenges.

Certara Business Overview & Revenue Model

Company Description

Certara (CERT) is a leading provider of software and services that support drug development and regulatory submission processes in the pharmaceutical and biotechnology sectors. The company specializes in modeling and simulation technologies that help optimize drug development, enhance decision-making, and improve patient outcomes. Certara offers a range of core products, including pharmacokinetic and pharmacodynamic modeling software, regulatory consulting services, and training programs aimed at accelerating the drug development process for its clients.

How the Company Makes Money

Certara generates revenue primarily through a combination of software licensing fees, professional services, and subscription-based models. Key revenue streams include the sale of its modeling and simulation software products, which are licensed to pharmaceutical companies and research institutions. Additionally, Certara provides consulting services that assist clients with regulatory submissions and drug development strategies, contributing to its earnings. The company also benefits from partnerships with leading pharmaceutical firms and research organizations, which enhance its market reach and credibility. Furthermore, Certara's subscription services for ongoing access to its software and tools create a stable, recurring revenue stream.

Certara Financial Statement Overview

Summary

Certara demonstrates a solid financial foundation with consistent revenue growth and effective cash flow management. While profitability margins are currently modest, the company maintains a stable balance sheet with low leverage. Continued focus on improving net profit margins and operational efficiency could enhance overall financial performance.

Income Statement

Certara's income statement shows a positive revenue growth trend with a 2.41% increase in the TTM period. The gross profit margin remains strong at 57.65%, indicating efficient cost management. However, the net profit margin is relatively low at 1.97%, suggesting limited profitability. The EBIT and EBITDA margins have improved but remain modest, highlighting potential operational challenges.

Balance Sheet

The balance sheet reflects a stable financial position with a low debt-to-equity ratio of 0.29, indicating prudent leverage management. The equity ratio is healthy, and while the return on equity is low at 0.75%, it shows improvement over previous periods. Overall, the balance sheet suggests financial stability with room for enhanced profitability.

Cash Flow

Cash flow analysis reveals a strong free cash flow growth rate of 6.39% in the TTM period, indicating robust cash generation. The operating cash flow to net income ratio is high at 0.78, reflecting efficient cash conversion. The free cash flow to net income ratio exceeds 1, showcasing effective cash management and potential for reinvestment.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	415.55M	385.15M	354.34M	335.64M	286.10M	243.53M
Gross Profit	241.35M	230.63M	213.31M	203.07M	174.49M	142.76M
EBITDA	106.60M	72.37M	23.84M	89.00M	58.58M	17.87M
Net Income	10.88M	-12.05M	-55.36M	14.73M	-13.27M	-49.40M
Balance Sheet
Total Assets	1.54B	1.58B	1.56B	1.57B	1.51B	1.27B
Cash, Cash Equivalents and Short-Term Investments	172.71M	179.18M	234.95M	236.59M	185.80M	271.38M
Total Debt	302.51M	311.90M	302.57M	308.13M	308.38M	299.37M
Total Liabilities	471.05M	516.45M	516.30M	493.26M	469.88M	447.27M
Stockholders Equity	1.06B	1.06B	1.05B	1.08B	1.04B	822.13M
Cash Flow
Free Cash Flow	105.11M	78.84M	80.98M	91.11M	51.49M	36.87M
Operating Cash Flow	116.88M	80.47M	82.75M	92.54M	60.39M	44.81M
Investing Cash Flow	-116.69M	-112.37M	-79.55M	-27.84M	-269.92M	-8.61M
Financing Cash Flow	-60.48M	-21.01M	-9.45M	-7.36M	123.39M	208.21M

Certara Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 8.03
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CERT, the sentiment is Negative. The current price of 8.03 is below the 20-day moving average (MA) of 10.07, below the 50-day MA of 11.35, and below the 200-day MA of 11.46, indicating a bearish trend. The MACD of -1.06 indicates Positive momentum. The RSI at 24.05 is Positive, neither overbought nor oversold. The STOCH value of 3.50 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CERT.

Certara Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OMCL	69 Neutral	$1.55B	80.49	1.62%	―	10.67%	―
CERT	58 Neutral	$1.32B	123.00	1.03%	―	11.47%	―
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
SOPH	50 Neutral	$316.27M	-4.26	-86.09%	―	13.66%	-2.65%
HCAT	44 Neutral	$149.24M	―	-31.33%	―	4.64%	-17.17%
SDGR	44 Neutral	$1.24B	―	-45.67%	―	32.90%	1.85%
DH	42 Neutral	$396.10M	-1.05	-47.69%	―	-5.30%	46.01%

Certara Corporate Events

Certara’s Earnings Call: Mixed Sentiment Amid Growth

Certara’s recent earnings call presented a mixed sentiment, reflecting both achievements and challenges. The company reported robust growth in its software segment and increased R&D investment, alongside successful product launches and progress in the Chemaxon acquisition. However, these positives were tempered by noticeable challenges in the services segment and slower bookings growth, driven by cautious spending among Tier 1 customers. This balance of positive and negative elements suggests a mixed environment for Certara.

Certara, Inc. Reports Strong Q3 2025 Results

Certara, Inc. is a global leader in model-informed drug development, offering biosimulation software and services to biopharmaceutical companies, academic institutions, and regulatory agencies worldwide. In its third quarter of 2025, Certara reported a revenue increase to $104.6 million, marking a 10% growth compared to the same period in 2024. The company also saw a significant rise in software revenue by 22% and a modest increase in services revenue by 3%. Notably, Certara transitioned from a net loss to a net income of $1.5 million, reflecting a 211% improvement year-over-year. The company’s adjusted EBITDA also rose by 7% to $35.2 million. Certara’s strategic focus on biosimulation technology is evident with the launch of new software products like CertaraIQ for QSP modeling, aimed at expanding its market reach. Despite some hesitancy in spending within certain service areas, the company remains optimistic, adjusting its profitability targets upwards and narrowing its revenue guidance for the full year 2025. Looking ahead, Certara is poised for sustainable growth, driven by continued investment in research and development and commercial efforts, as it aims to achieve its updated financial guidance for the year.

Certara Reduces Borrowing Costs with Credit Amendment

On October 16, 2025, Certara USA, Inc., a subsidiary of Certara, Inc., entered into a Sixth Amendment to its credit agreement, originally dated August 15, 2017. This amendment involves a reduction in the applicable rate for term loans, which is expected to decrease the company’s borrowing costs and result in interest expense savings. The amendment introduces Replacement Term Loans with options for interest rates tied to either the Term SOFR rate or an Alternate Base Rate, and these loans were used to refinance existing term loans.

The most recent analyst rating on (CERT) stock is a Hold with a $16.00 price target. To see the full list of analyst forecasts on Certara stock, see the CERT Stock Forecast page.

Certara, Inc. Reports Strong Q2 2025 Earnings Growth

Certara, Inc. recently held its second quarter 2025 earnings call, which conveyed a generally positive sentiment. The company reported robust growth in revenue and bookings, primarily driven by its software performance and strategic investments in AI and R&D. Despite some challenges such as timing-related softness in Tier 1 software, regulatory services softness, and geopolitical uncertainties, the overall highlights of the call outweighed the lowlights, indicating a positive outlook for the company.