Certara (CERT) AI Stock Analysis

• Market Cap: $1.46B
• Dividend Yield: N/A
• Average Volume (3M): 2.34M
• Price to Earnings (P/E): 137.7
• Beta (1Y): 1.50
• 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: 1,367,827
• 30 Day Avg. Volume: 2,338,892
• 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: 1.44
• Enterprise Value/Revenue: 5.05
• Enterprise Value/Gross Profit: 8.69
• Enterprise Value/Ebitda: 19.67
• 1Y Price Target: $13.25
• Price Target Upside: 42.78% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10
• EPS Forecast (FY): 0.45
• Revenue Forecast (FY): $418.41M

• Rating: 62 Neutral
• Price Target: $10.00 ▲(7.76% Upside)

Certara's overall stock score reflects a stable financial foundation and positive corporate events, such as the appointment of a new CEO and reduced borrowing costs. However, the high P/E ratio and technical indicators suggest caution, with the stock appearing overvalued and lacking strong momentum. Mixed results from the earnings call further contribute to a moderate outlook.

Positive Factors

Software Segment Growth

The strong growth in the software segment indicates robust demand and effective product offerings, contributing to long-term revenue stability.

New Product Launches

The introduction of new products enhances Certara's competitive edge and expands its market reach, supporting sustained growth.

Leadership Change

The new CEO with extensive industry experience is expected to drive strategic growth and innovation, strengthening Certara's market position.

Negative Factors

Services Segment Challenges

Declines in the services segment reflect challenges in client engagement, potentially impacting revenue diversification and growth.

Bookings Growth Below Expectations

Slower bookings growth indicates cautious spending by key clients, which could hinder future revenue expansion and market confidence.

Regulatory Services Performance

Weak performance in regulatory services suggests operational inefficiencies and market challenges, affecting overall service delivery.

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: 9.28
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 9.28 is above the 20-day moving average (MA) of 8.86, below the 50-day MA of 10.61, and below the 200-day MA of 11.15, indicating a bearish trend. The MACD of -0.31 indicates Negative momentum. The RSI at 40.45 is Neutral, neither overbought nor oversold. The STOCH value of 34.71 is Neutral, 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	71 Outperform	$1.97B	101.52	1.62%	―	10.67%	―
CERT	62 Neutral	$1.46B	137.69	1.03%	―	11.47%	―
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
SOPH	51 Neutral	$316.27M	-4.26	-86.09%	―	13.66%	-2.65%
HCAT	50 Neutral	$186.73M	―	-31.33%	―	4.64%	-17.17%
SDGR	44 Neutral	$1.31B	―	-45.67%	―	32.90%	1.85%
DH	42 Neutral	$396.10M	-1.05	-47.69%	―	-5.30%	46.01%

Certara Corporate Events

Certara Appoints Jon Resnick as New CEO

On December 11, 2025, Certara, a leader in model-informed drug development, announced the appointment of Jon Resnick as the new Chief Executive Officer, effective January 1, 2026. Resnick, who brings over 20 years of experience from IQVIA, will succeed William F. Feehery, who will step down on December 31, 2025, and serve as an advisor during the transition. The company reaffirmed its 2025 financial outlook, indicating stability and confidence in the leadership transition. Resnick’s appointment is expected to propel Certara’s growth and innovation in drug discovery and development, leveraging his extensive experience in healthcare strategy and operations.

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.