Certara (CERT) AI Stock Analysis

• Market Cap: $1.82B
• Dividend Yield: N/A
• Average Volume (3M): 1.81M
• Price to Earnings (P/E): 230.0
• Beta (1Y): 1.42
• Revenue Growth: 11.61%
• EPS Growth: N/A
• Country: US
• Employees: 1,487
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Healthcare Information Services
• EPS (TTM): 0.07
• Shares Outstanding: 160,623,580
• 10 Day Avg. Volume: 1,511,109
• 30 Day Avg. Volume: 1,809,327
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.11
• Enterprise Value/Revenue: 5.00
• Enterprise Value/Gross Profit: 8.67
• Enterprise Value/Ebitda: 41.00
• 1Y Price Target: $15.33
• Price Target Upside: 34.95% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8

• Rating: 63 Neutral
• Price Target: $12.50 ▲(10.04% Upside)

Certara's overall stock score is driven by strong financial performance and positive earnings call sentiment, highlighting robust growth in software revenue and strategic investments. However, the high P/E ratio suggests overvaluation, and technical indicators show mixed signals, contributing to a moderate overall score.

Positive Factors

Software Revenue Growth

The strong growth in software revenue, particularly from Simcyp, indicates robust demand and strengthens Certara's market position in biosimulation technology.

Regulatory Milestone

Achieving EMA qualification enhances Certara's competitive advantage, potentially increasing adoption by pharmaceutical companies seeking validated modeling tools.

Cash Flow Generation

Strong cash flow generation supports Certara's ability to invest in growth initiatives and maintain financial stability, crucial for long-term success.

Negative Factors

Tier 1 Software Renewal Issues

Delays in Tier 1 software renewals could impact short-term revenue consistency, posing a challenge to maintaining steady growth.

Geopolitical and Macroeconomic Challenges

Caution among large pharma clients due to external uncertainties may slow decision-making, affecting Certara's revenue growth and client acquisition.

Regulatory Business Review Delays

Delays in the strategic review of the regulatory business could hinder timely strategic adjustments, affecting long-term operational efficiency.

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 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.

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.

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.

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

• Technical Analysis Sentiment: Negative
• Last Price: 11.36
• 50DMA: Negative
• 100DMA: Positive
• 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 11.36 is below the 20-day moving average (MA) of 12.40, below the 50-day MA of 11.76, and below the 200-day MA of 11.75, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 41.19 is Neutral, neither overbought nor oversold. The STOCH value of 16.28 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	―	$1.54B	68.07	1.87%	―	6.39%	―
CERT	―	$1.82B	229.96	0.76%	―	11.61%	―
SOPH	―	$287.21M	-3.87	-74.09%	―	7.31%	-7.49%
SDGR	―	$1.51B	―	-44.40%	―	18.59%	10.96%
HCAT	―	$230.83M	―	-28.42%	―	5.55%	-0.99%
Sector *	―	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
DH	―	$408.92M	―	-64.27%	―	-5.24%	23.59%

Certara Corporate Events

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.

Certara, Inc. Reports Strong Q2 2025 Growth

Certara, Inc. is a global leader in model-informed drug development, providing biosimulation software and services to biopharmaceutical companies, academic institutions, and regulatory agencies worldwide. In its second quarter of 2025 financial report, Certara, Inc. announced a 12% increase in revenue compared to the same period last year, reaching $104.6 million. The company also reported significant growth in its software revenue, which rose by 22%, and service revenue, which increased by 5%. Despite a net loss of $2.0 million, this marks an 84% improvement from the previous year’s second quarter net loss of $12.6 million.