Certara (CERT) AI Stock Analysis

• Market Cap: $1.40B
• Dividend Yield: N/A
• Average Volume (3M): 1.62M
• Price to Earnings (P/E): 130.4
• Beta (1Y): 1.52
• 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: 1,571,722
• 30 Day Avg. Volume: 1,616,819
• 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: 1.09
• Enterprise Value/Revenue: 3.68
• Enterprise Value/Gross Profit: 5.99
• Enterprise Value/Ebitda: 14.35
• 1Y Price Target: $12.11
• Price Target Upside: 37.77% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 62 Neutral
• Price Target: $10.50 ▲(19.45% 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 revenue growth

Sustained double‑digit software growth signals expanding adoption of Certara’s recurring, subscription products. Software revenue is stickier than project work, supporting predictable cash flows, higher gross margins, and multi‑year customer relationships that underpin durable revenue expansion.

Strong free cash flow generation

Consistent free cash flow growth and high cash conversion provide financial flexibility for R&D, M&A integration, and buybacks. Robust FCF reduces reliance on external financing and supports reinvestment into product development, sustaining long‑term competitive capability.

Low leverage and healthy balance sheet

A low debt load gives Certara capacity to invest, withstand cyclical R&D budget swings, and pursue strategic M&A without overstretching liquidity. Financial flexibility enhances resilience and supports multi‑year investments in product and go‑to‑market scale.

Negative Factors

Services bookings weakness

A decline in services bookings reflects volatility and lower predictability in project work, weakening a key revenue stream that complements software. Persistent services weakness can depress overall growth and reduce cross‑sell opportunities that lock customers into long development cycles.

Bookings growth slowdown among large clients

Bookings are a leading indicator for future revenue; stagnating bookings from Tier‑1 clients signal demand sensitivity to big pharma spending cycles. Continued caution by large sponsors risks slower revenue conversion and creates uncertainty in multi‑quarter planning and resource allocation.

Low net profitability

Despite strong gross margins, the low net margin limits internal capacity to fund growth and makes performance sensitive to operating cost swings. Sustained low profitability can constrain strategic investments and reduce ability to scale margins as software mixes increase.

Certara Business Overview & Revenue Model

Company Description

Certara, Inc. provides software products and technology-enabled services to customers for biosimulation in drug discovery, preclinical and clinical research, regulatory submissions, and market access. It offers medicines to patients using biosimulation software, technology, and services to transform drug discovery and development. The company also provides related technology-enabled services to guide its customers' new drugs through the regulatory submission process and into the market. Its technology-enabled services include mechanistic biosimulation, empirical biosimulation, drug development and regulatory strategy, clinical pharmacology, model-based meta-analysis, regulatory writing and medical communications, regulatory operations, and market access. Further, company offers software, comprising mechanistic biosimulation platform, empirical PK/PD biosimulation platform, data standardization and compliance software, scientific informatics platform, clinical outcomes databases for biosimulation, authoring and management of regulatory submissions platform, and market access communication platform. The company serves biopharmaceutical companies, and academic and government institutions. It has operations in the United States, Canada, Spain, Luxembourg, Portugal, the United Kingdom, Germany, France, the Netherlands, Denmark, Switzerland, Italy, Poland, Japan, the Philippines, India, Australia, and China. Certara Inc. was founded in 2008 and is headquartered in Princeton, New Jersey.

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	255.33M	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: 8.79
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• 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 8.79 is below the 20-day moving average (MA) of 9.46, below the 50-day MA of 9.13, and below the 200-day MA of 10.88, indicating a bearish trend. The MACD of 0.05 indicates Positive momentum. The RSI at 38.98 is Neutral, neither overbought nor oversold. The STOCH value of 12.43 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	71 Outperform	$2.18B	113.74	1.62%	―	10.67%	―
CERT	62 Neutral	$1.40B	130.42	1.03%	―	11.47%	―
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
SOPH	51 Neutral	$356.20M	-4.71	-86.09%	―	13.66%	-2.65%
HCAT	50 Neutral	$152.07M	-1.36	-31.33%	―	4.64%	-17.17%
DH	49 Neutral	$328.63M	-1.38	-47.69%	―	-5.30%	46.01%
SDGR	44 Neutral	$1.03B	-5.81	-45.67%	―	32.90%	1.85%

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.

The most recent analyst rating on (CERT) stock is a Hold with a $9.50 price target. To see the full list of analyst forecasts on Certara stock, see the CERT Stock Forecast page.