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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on CERT

Certara, Inc.'s recent performance faced challenges despite strong quarterly earnings. The company's Q3 earnings beat estimates with $0.14 per share, surpassing the Zacks Consensus Estimate of $0.11 per share. However, analyst downgrades and subdued market conditions have impacted the stock. Certara's AI-enabled platforms, including AI MIDD and CertaraIQ, are positioned for long-term growth. Intech Investment Management LLC's recent $329,000 investment in the company may boost investor confidence.

1.c. Company Highlights

2. Certara's Q3 Earnings: A Closer Look at the Numbers

The company's third-quarter revenue of $104.6 million was in line with expectations, representing a 10% year-over-year growth. Adjusted EBITDA of $35.2 million was up 6% from the same period last year, with a margin of 34%. Earnings per share (EPS) came in at $0.14, beating estimates of $0.11. The company's software revenue was $43.8 million, a 22% increase over the prior year period. The results demonstrate the company's ability to drive growth through its software offerings, with R&D expenses increasing by 24% year-over-year to support this growth.

Publication Date: Nov -14

📋 Highlights
  • Revenue Growth:: Q3 revenue reached $104.6 million, up 10% year-over-year.
  • Adjusted EBITDA Margin:: Maintained a strong margin of 34% ($35.2 million), up 6% from the prior year.
  • R&D Investment Surge:: R&D expenses rose 24% YoY, now accounting for 10% of revenue.
  • Revenue Guidance Narrowed:: Full-year revenue forecast adjusted to $415–420 million, reflecting 8–9% growth.
  • AI-Driven Product Growth:: Phoenix and CertariIQ, with embedded AI, are positioned to drive 2026 growth, supported by $23–25 million in Chemaxon software revenue.

Revenue Growth and Margin Analysis

The revenue growth was driven by the company's software segment, which saw a 22% year-over-year increase. The adjusted EBITDA margin was 34%, indicating a relatively stable margin despite investments in R&D. The company's guidance for the full year has been narrowed to $415 million to $420 million, representing 8% to 9% growth compared to 2024. This guidance suggests that the company is confident in its ability to drive growth through its software offerings and other business segments.

Business Segment Performance

The company's QSP business has been growing ahead of the rest of the biosimulation business, with William Feehery stating that it is becoming an increasingly important part of the company's business. The company is attempting to create a standard product for QSP modelers, which could drive further growth. The company's new products, such as Phoenix and CertaraIQ, have embedded AI and have been well-received in the market, with Feehery expecting these products to drive growth in 2026.

Valuation Metrics

With a P/E Ratio of 169.57 and an EV/EBITDA ratio of 30.28, the company's valuation appears to be relatively high. However, the company's growth prospects, driven by its software offerings and QSP business, may justify this valuation. Analysts estimate next year's revenue growth at 6.9%, which may not be sufficient to justify the current valuation. The company's ROE and ROIC are relatively low, at 0.75% and 1.06%, respectively, which may indicate that the company's profitability is not as strong as its revenue growth.

Outlook and Conclusion

The company's outlook appears to be cautiously optimistic, with Feehery stating that recent developments, such as clarity on most-favored nation pricing and tariffs, could stabilize the macro environment and positively impact the business. However, the company's exposure to Tier 1 customers, which are investing in their own AI capabilities, could be a challenge. Overall, the company's results demonstrate its ability to drive growth through its software offerings, but the valuation appears to be relatively high.

3. NewsRoom

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Cerrado Gold Inc. (CERT:CA) Q3 2025 Earnings Call Transcript

Dec -01

Source: seekingalpha.com

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Intech Investment Management LLC Makes New $329,000 Investment in Certara, Inc. $CERT

Dec -01

Source: defenseworld.net

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Touchstone Small Company Fund Q3 2025 Performance Review

Nov -27

Source: seekingalpha.com

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Certara, Inc. (CERT) Presents at Stephens Annual Investment Conference 2025 Transcript

Nov -18

Source: seekingalpha.com

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Certara, Inc. (CERT) Presents at Jefferies London Healthcare Conference 2025 Transcript

Nov -18

Source: seekingalpha.com

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Certara, Inc. (CERT) Q3 2025 Earnings Call Transcript

Nov -07

Source: seekingalpha.com

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Certara, Inc. (CERT) Q3 Earnings Surpass Estimates

Nov -07

Source: zacks.com

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Certara Reports Third Quarter 2025 Financial Results

Nov -06

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.87%)

6. Segments

Services

Expected Growth: 7.5%

Certara's 7.5% growth driven by increasing adoption of model-informed drug development, rising demand for biosimulation and regulatory writing services, expansion into new therapeutic areas, and strategic partnerships with biopharmaceutical companies.

Software

Expected Growth: 8.5%

Certara's software growth is driven by increasing adoption in pharmaceutical R&D, rising demand for model-informed drug development, and expansion into new markets such as biotech and academia. Additionally, the company's strategic acquisitions and partnerships have enhanced its product offerings, contributing to the 8.5% growth rate.

7. Detailed Products

Simcyp Simulator

A platform that simulates clinical trials to predict the behavior of new drugs in virtual populations

PK-Sim

A software that predicts the pharmacokinetics of new drugs in various populations

Certara University

A training and education platform that provides courses and certifications in pharmacometrics and model-informed drug development

BaseCase Portal

A cloud-based platform that enables the creation and deployment of interactive, data-driven models and dashboards

Evidence & Access

A consultancy that provides strategic guidance on market access, health economics, and outcomes research

Model-Informed Drug Development (MIDD) Services

A consultancy that provides strategic guidance on model-informed drug development, including pharmacometrics, and clinical trial design

8. Certara, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Certara, Inc. has a moderate threat of substitutes due to the availability of alternative products and services in the market.

Bargaining Power Of Customers

Certara, Inc. has a low bargaining power of customers due to the lack of concentration of buyers in the market.

Bargaining Power Of Suppliers

Certara, Inc. has a moderate bargaining power of suppliers due to the presence of multiple suppliers in the market.

Threat Of New Entrants

Certara, Inc. has a high threat of new entrants due to the low barriers to entry in the market.

Intensity Of Rivalry

Certara, Inc. operates in a highly competitive market, leading to a high intensity of rivalry among competitors.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 21.77%
Debt Cost 7.66%
Equity Weight 78.23%
Equity Cost 12.00%
WACC 11.05%
Leverage 27.82%

11. Quality Control: Certara, Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Progyny

A-Score: 5.2/10

Value: 4.0

Growth: 8.1

Quality: 6.5

Yield: 0.0

Momentum: 8.0

Volatility: 4.3

1-Year Total Return ->

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Stock-Card
Doximity

A-Score: 5.1/10

Value: 0.3

Growth: 8.9

Quality: 9.5

Yield: 0.0

Momentum: 9.0

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
Certara

A-Score: 4.0/10

Value: 2.3

Growth: 5.9

Quality: 5.7

Yield: 0.0

Momentum: 7.0

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
GoodRx

A-Score: 3.5/10

Value: 5.2

Growth: 5.9

Quality: 5.9

Yield: 0.0

Momentum: 2.0

Volatility: 1.7

1-Year Total Return ->

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Stock-Card
R1 RCM

A-Score: 3.3/10

Value: 3.4

Growth: 3.8

Quality: 2.3

Yield: 0.0

Momentum: 5.0

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
10x Genomics

A-Score: 2.9/10

Value: 5.9

Growth: 3.2

Quality: 3.8

Yield: 0.0

Momentum: 2.5

Volatility: 2.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

9.22$

Current Price

9.22$

Potential

-0.00%

Expected Cash-Flows