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Certara (CERT)
NASDAQ:CERT
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Certara
(NASDAQ:CERT)
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Rating:65Neutral
Price Target:
$11.00
▼(-4.43% Downside)
Certara's overall stock score is driven by strong financial performance and positive earnings call sentiment, highlighting robust revenue growth and strategic advancements. However, the high P/E ratio suggests overvaluation, and technical indicators show a neutral to slightly bearish trend, which tempers the overall score.
Positive Factors
Revenue Growth
Certara's consistent revenue growth indicates strong market demand for its products and services, supporting long-term business expansion.
Regulatory Milestone
Achieving EMA qualification enhances Certara's competitive edge, potentially increasing adoption of its software in regulatory submissions.
Product Innovation
The launch of CertaraIQ signifies strategic innovation, expanding Certara's product offerings and addressing growing demand for AI-driven solutions.
Negative Factors
Tier 1 Software Renewal Issues
Delays in software renewals can impact revenue predictability and cash flow, posing a risk to financial stability if not resolved promptly.
Macroeconomic Challenges
Macroeconomic uncertainties can delay client decision-making, affecting Certara's sales cycles and potentially slowing revenue growth.
Regulatory Business Review Delays
Delays in strategic reviews can hinder timely decision-making and adaptation, impacting long-term strategic positioning and growth.
Certara (CERT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.80B
Dividend YieldN/A
Average Volume (3M)1.46M
Price to Earnings (P/E)227.1
Beta (1Y)1.35
Revenue Growth11.61%
EPS GrowthN/A
CountryUS
Employees1,487
SectorHealthcare
Sector Strength45
IndustryMedical - Healthcare Information Services
Share Statistics
EPS (TTM)0.07
Shares Outstanding160,623,580
10 Day Avg. Volume1,771,740
30 Day Avg. Volume1,457,048
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.13
Enterprise Value/Revenue5.00
Enterprise Value/Gross Profit8.67
Enterprise Value/Ebitda41.00
Forecast
1Y Price Target
$13.92Price Target Upside20.94% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Certara Business Overview & Revenue Model
Company DescriptionCertara, 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 MoneyCertara 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 Earnings Call Summary
Earnings Call Date:Aug 06, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 05, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong performance in terms of revenue and bookings growth, driven by software, especially Simcyp, and significant regulatory achievements. However, there were concerns about timing issues with Tier 1 software renewals and macroeconomic challenges impacting customer decision-making. Despite these issues, the company's strong execution and positive outlook contributed to an overall positive sentiment.Q2-2025 Updates
Positive Updates
Strong Revenue and Bookings Growth
Certara reported second quarter revenue of $104.6 million, representing 12% year-over-year growth. Second quarter bookings were $112 million, reflecting a 13% year-over-year increase.
Software Revenue Growth
Software revenue reached $46.7 million, increasing 22% over the prior year period. Simcyp, in particular, showed strong growth.
Significant Regulatory Milestone for Simcyp
Certara Simcyp received European Medicines Agency (EMA) qualification for a PBPK Modeling Platform, becoming the only software with this designation.
Introduction of CertaraIQ
Certara announced the upcoming release of CertaraIQ, an AI-enabled QSP software solution, signifying a major step in growing the market for QSP solutions.
Positive Impact of QSP Collaboration
Certara's QSP collaboration with IGI resulted in a clinical starting dose that reduced the need for animal testing and received a Fast Track designation for a new treatment.
Negative Updates
Tier 1 Software Renewal Timing Issues
There was timing-related softness in Tier 1 software renewals, although this is expected to normalize in the second half of the year.
Macro and Geopolitical Challenges
Large pharma companies remain cautious due to a rapidly changing geopolitical and macroeconomic environment, affecting decision-making timelines.
Regulatory Business Review Delays
The strategic review of Certara's regulatory business has taken longer than expected, attributed to geopolitical and macroeconomic uncertainties.
Company Guidance
During Certara's second-quarter 2025 earnings call, the company reiterated its full-year guidance based on strong financial performance and a robust sales funnel. Key metrics included a 12% year-over-year revenue growth to $104.6 million and a 13% increase in bookings to $112 million. Software revenue grew 22% to $46.7 million, with Simcyp and Chemaxon contributing significantly, while services revenue increased 5% to $57.9 million. The company highlighted strong demand in high-growth areas like QSP services and Simcyp software. Certara is on track with its strategic investments, including the development of an AI-enabled MIDD platform, and expects to launch CertaraIQ later this year. Despite macroeconomic challenges, the company remains confident in its growth trajectory, supported by ongoing interest in biosimulation technology and regulatory advancements such as the EMA qualification for Certara's Simcyp software. Adjusted EBITDA for the quarter was $31.9 million, representing a 31% margin.Certara Financial Statement Overview
Summary
Certara demonstrates a solid financial performance with consistent revenue growth and improving profitability. The balance sheet is stable with low leverage, and cash flows are strong, supporting future growth. Continued focus on operational efficiency and capital utilization could further enhance financial health.Income Statement
Certara's income statement shows a positive trajectory with a TTM revenue growth rate of 2.85% and improving gross profit margins. The company has transitioned from a net loss to a net profit, indicating improved profitability. However, the EBIT margin remains low, suggesting room for operational efficiency improvements.72
Positive
Balance Sheet
The balance sheet reflects a stable financial position with a low debt-to-equity ratio of 0.29, indicating prudent leverage management. Return on equity has improved but remains modest at 0.75%, suggesting potential for better capital utilization. The equity ratio is healthy, supporting financial stability.65
Positive
Cash Flow
Cash flow analysis reveals strong free cash flow growth of 15.89% in the TTM, indicating robust cash generation capabilities. The operating cash flow to net income ratio of 0.78 suggests efficient cash conversion, while the free cash flow to net income ratio exceeds 1, highlighting strong cash flow relative to earnings.78
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 405.75M | 385.15M | 354.34M | 335.64M | 286.10M | 243.53M |
| Gross Profit | 233.91M | 230.63M | 213.31M | 203.07M | 174.49M | 142.76M |
| EBITDA | 49.47M | 72.37M | 23.84M | 89.00M | 58.58M | 17.87M |
| Net Income | 7.98M | -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 | 162.27M | 179.18M | 234.95M | 236.59M | 185.80M | 271.38M |
| Total Debt | 307.86M | 311.90M | 302.57M | 308.11M | 303.02M | 299.37M |
| Total Liabilities | 472.87M | 516.45M | 516.30M | 493.26M | 469.88M | 447.27M |
| Stockholders Equity | 1.07B | 1.06B | 1.05B | 1.08B | 1.04B | 822.13M |
Cash Flow | ||||||
| Free Cash Flow | 103.67M | 78.84M | 67.43M | 80.01M | 51.49M | 36.87M |
| Operating Cash Flow | 101.55M | 80.47M | 82.75M | 92.54M | 60.39M | 44.81M |
| Investing Cash Flow | -115.41M | -112.37M | -79.55M | -27.84M | -269.92M | -8.61M |
| Financing Cash Flow | -51.60M | -21.01M | -9.45M | -7.36M | 123.39M | 208.21M |
Certara Technical Analysis
Positive
11.51
Price Trends
10.75
Positive
11.23
Positive
11.56
Negative
Market Momentum
0.14
Negative
58.52
Neutral
85.71
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CERT, the sentiment is Positive. The current price of 11.51 is above the 20-day moving average (MA) of 10.90, above the 50-day MA of 10.75, and below the 200-day MA of 11.56, indicating a neutral trend. The MACD of 0.14 indicates Negative momentum. The RSI at 58.52 is Neutral, neither overbought nor oversold. The STOCH value of 85.71 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CERT.
Certara Risk Analysis
Certara disclosed 42 risk factors in its most recent earnings report. Certara reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Certara Peers Comparison
Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | 1.43B | 63.21 | 1.83% | ― | 6.39% | 0.00% | |
66 Neutral | 1.39B | -56.19 | -8.07% | ― | 15.31% | 77.02% | |
65 Neutral | $1.80B | 227.13 | 0.76% | ― | 11.61% | ― | |
60 Neutral | 310.56M | -4.91 | -51.09% | 0.39% | 20.01% | -750.59% | |
51 Neutral | 1.00B | -5.32 | -18.04% | ― | -6.71% | -71.40% | |
50 Neutral | 1.40B | -7.67 | -52.89% | ― | 18.59% | 10.96% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
Performance Comparison
CERT
Certara
11.51
0.20
1.77%
OMCL
Omnicell
31.18
-12.24
-28.19%
HCAT
Health Catalyst
2.81
-6.02
-68.18%
SDGR
Schrodinger
19.03
-1.81
-8.69%
SOPH
SOPHiA GENETICS
3.23
-1.00
-23.64%
DH
Definitive Healthcare Corp
4.09
-0.72
-14.97%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.