Shares of Certara, Inc. (NASDAQ:CERT) fell to a new 52-week low on October 7, 2023, following a downgrade by Barclays. The investment bank lowered its price target for the stock from $16.00 to $14.00, although it maintains an overweight rating on the company. During trading, Certara reached a low of $8.47 before closing at $8.67 with a trading volume of over 9.1 million shares, having previously closed at $11.27.
Analysts have expressed mixed opinions on Certara’s stock performance. On August 7, UBS Group reduced its price objective from $17.50 to $15.00, simultaneously assigning a buy rating. More recently, on September 5, Zacks Research upgraded Certara from a strong sell to a hold rating. On October 8, Weiss Ratings reiterated a sell rating, while KeyCorp raised its target price from $15.00 to $16.00 and maintained its overweight rating. Craig Hallum also began coverage of Certara, setting a buy rating with a price target of $16.00.
Currently, six research analysts have assigned a buy rating to Certara, five have given it a hold rating, and one has issued a sell rating, according to MarketBeat. The average target price among analysts stands at $15.38.
Institutional Investors Adjust Positions
Recent changes in holdings by institutional investors reflect ongoing interest in Certara. Wasatch Advisors LP increased its stake by 45.7% in the second quarter, now owning 13,532,882 shares valued at approximately $158.34 million. Geneva Capital Management LLC raised its holdings by 7.8%, acquiring an additional 443,206 shares during the same period, bringing its total to 6,114,895 shares worth $71.54 million.
Moreover, the Teacher Retirement System of Texas boosted its position by 25.3%, and Ameriprise Financial Inc. enhanced its stake by 27.1%. Mackenzie Financial Corp also increased its holdings by 47.7%. Overall, institutional investors and hedge funds own approximately 73.96% of Certara’s stock.
Company Performance and Financial Outlook
Certara’s financial metrics reveal a debt-to-equity ratio of 0.27, with both quick and current ratios at 2.09. The company has a market capitalization of $1.39 billion and a price-to-earnings ratio of 123.86. Its 50-day moving average price is $11.77, while the 200-day moving average stands at $11.47.
The company recently announced its quarterly earnings on November 6, 2023, reporting earnings per share of $0.14, exceeding analyst expectations of $0.11. Certara’s revenue for the quarter reached $104.62 million, slightly above the forecast of $104.53 million. The net margin during this period was 2.62%, with a return on equity of 5.18%. Looking ahead, Certara has provided guidance for fiscal year 2025, projecting earnings per share between $0.450 and $0.470. Analysts estimate that Certara will post earnings of $0.28 for the current year.
Founded to support biosimulation in drug development, Certara offers software solutions and technology-enabled services for drug discovery, preclinical and clinical research, regulatory submissions, and market access. The company operates both in the United States and internationally, aiming to enhance model-informed drug development through its advanced biosimulation capabilities.
