Certara (NASDAQ:CERT) Issues Earnings Results, Misses Expectations By $0.01 EPS

Certara (NASDAQ:CERT) announced its quarterly earnings data on Tuesday. The company reported $0.08 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.09 by ($0.01), FiscalAI reports. Certara had a positive return on equity of 3.86% and a negative net margin of 16.75%.The firm had revenue of $93.27 million during the quarter, compared to the consensus estimate of $98.09 million. During the same period in the previous year, the business earned $0.07 EPS. The firm’s revenue for the quarter was down 10.8% on a year-over-year basis.

Here are the key takeaways from Certara’s conference call:

• Second-quarter revenue grew 1% to $93.3 million, with software revenue up 4% and services revenue down 3%. Management reaffirmed full-year revenue growth guidance of 0%–4%, or $367 million–$382 million on a continuing-operations basis.
• Software bookings increased 9% in the quarter and trailing-12-month software bookings rose 8%, supported by Simcyp, Phoenix and Pinnacle 21. The company also reported a 27% year-over-year increase in pipeline and expects software revenue to reach at least the high end of its annual growth range.
• Certara is implementing a new commercial model, appointing Julien Perrier as Chief Commercial Officer and emphasizing specialist-led services sales. A May workforce reduction affecting about 5% of employees is expected to generate approximately $13 million in annualized savings, helping offset stranded costs from the divestiture and fund AI investment.
• Services bookings declined 6% in the second quarter, and management expects full-year services revenue to be at or below the low end of its 0%–4% growth range. Adjusted EBITDA margin guidance was reduced to 29%–31%, while the company posted a $6.1 million continuing-operations net loss versus $1.5 million of income in the prior-year quarter.
• The board authorized an additional $50 million share-repurchase program after Certara completed a prior $100 million authorization. Management also highlighted growing cloud adoption, AI-enabled product development and partnerships—including NVIDIA—as longer-term growth opportunities.

Certara Stock Up 1.8%

Shares of CERT traded up $0.14 during mid-day trading on Thursday, hitting $8.15. 345,388 shares of the company traded hands, compared to its average volume of 3,728,124. The company has a market capitalization of $1.27 billion, a PE ratio of -18.14 and a beta of 1.44. Certara has a 1-year low of $4.45 and a 1-year high of $13.88. The company has a quick ratio of 1.88, a current ratio of 2.55 and a debt-to-equity ratio of 0.30. The business has a 50 day moving average of $6.47 and a 200 day moving average of $6.55.

Institutional Investors Weigh In On Certara

Several institutional investors and hedge funds have recently made changes to their positions in CERT. Wasatch Advisors LP increased its holdings in Certara by 28.6% in the 3rd quarter. Wasatch Advisors LP now owns 17,398,337 shares of the company’s stock worth $212,608,000 after buying an additional 3,865,455 shares during the period. Dimensional Fund Advisors LP increased its stake in shares of Certara by 0.4% in the fourth quarter. Dimensional Fund Advisors LP now owns 8,387,484 shares of the company’s stock worth $73,894,000 after acquiring an additional 35,203 shares during the period. Deerfield Management Company L.P. raised its holdings in shares of Certara by 71.7% during the third quarter. Deerfield Management Company L.P. now owns 6,739,537 shares of the company’s stock worth $82,357,000 after purchasing an additional 2,813,438 shares during the last quarter. Ameriprise Financial Inc. lifted its position in Certara by 27.1% during the second quarter. Ameriprise Financial Inc. now owns 5,460,630 shares of the company’s stock valued at $63,889,000 after purchasing an additional 1,165,064 shares during the period. Finally, State Street Corp boosted its holdings in Certara by 2.2% in the fourth quarter. State Street Corp now owns 3,918,784 shares of the company’s stock valued at $34,524,000 after purchasing an additional 83,698 shares during the last quarter. 73.96% of the stock is currently owned by institutional investors and hedge funds.

Wall Street Analysts Forecast Growth

A number of research firms have weighed in on CERT. Morgan Stanley reduced their target price on Certara from $11.00 to $10.00 and set an “equal weight” rating on the stock in a research note on Tuesday, May 12th. BMO Capital Markets dropped their target price on shares of Certara from $7.00 to $6.00 and set a “market perform” rating on the stock in a research note on Tuesday, May 12th. Craig Hallum lowered their price target on Certara from $10.00 to $8.00 and set a “hold” rating for the company in a report on Tuesday, May 12th. Weiss Ratings reaffirmed a “sell (e+)” rating on shares of Certara in a research report on Friday, May 29th. Finally, Stephens lowered their target price on Certara from $10.00 to $9.00 and set an “overweight” rating for the company in a report on Tuesday, May 12th. One analyst has rated the stock with a Strong Buy rating, five have given a Buy rating, six have assigned a Hold rating and one has assigned a Sell rating to the company’s stock. According to data from MarketBeat.com, the stock presently has an average rating of “Hold” and a consensus target price of $8.95.

About Certara

Certara is a biosimulation software and services company that partners with pharmaceutical, biotechnology and medical device developers to accelerate drug discovery, development and regulatory approval. The company’s platform integrates quantitative pharmacology, real-world evidence, artificial intelligence and machine learning to model and simulate drug behavior across a range of therapeutic areas and patient populations. By applying these mechanistic and data-driven approaches, Certara helps its clients predict clinical outcomes, optimize dosing strategies and streamline decision-making throughout the product lifecycle.

The company’s offerings are divided into software tools and consulting services.