CERT · Certara
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $13.61
Note written ·
Price against the kill line
15.0% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $13.61, on record since 11 November 2026. The shares are up 44.6% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $13.61, above the 6 November 2026 52-week high, would show the shares leading the S&P 500 and prove this call wrong. So would a fourth-quarter report with services bookings up year over year and a 2027 outlook of mid-single-digit revenue growth or better.
Research onlyNot in the portfolio.
Key figures from the filings · Technology
Quarter to 30 September 2026, filed 5 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 94.9
- Revenue, change on a year (%)
- +4.4
- Gross margin (%)
- 66.9
- Operating margin (%)
- 2.4
- Free cash flow, four quarters ($M)
- 78.2
- Net cash, cash less debt ($M)
- −76.3
- Free-cash-flow yield (%)
- 4.4
All filed numbers
What Certara reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 94.9 | +4.4 | 66.9 | 2.4 |
| first filed | 93.3 | +1.0 | 62.3 | −0.2 |
| first filed | 107 | +0.9 | 61.1 | −4.0 |
| first filed restated | 90.9 | −4.1 | 63.3 | −0.6 |
| first filed restated | 92.4 | −1.0 | 62.9 | 8.3 |
| Pre-tax income ($M) | −1.2 |
| Net income ($M) four quarters: −64.3 | 5.6 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | −4.8 |
| Operating cash flow ($M) | 81.2 |
| Capital spending ($M) | 3.0 |
| Free cash flow ($M) | 78.2 |
| Cash and short-term investments ($M) | 215 |
| Debt ($M) long-term debt | 291 |
| Net cash, cash less debt ($M) | −76.3 |
| Deferred revenue ($M) +19.4% on a year | 78.6 |
| Backlog, orders not yet delivered ($M) −13.4% on a year | 128 |
| Receivables ($M) | 77.2 |
| Inventory ($M) | Not reported |
| Shareholders' equity ($M) | 978 |
| Market value ($M) | 1,765 |
| Enterprise value, market value plus net debt ($M) | 1,841 |
| Enterprise value to sales (×) | Not available |
| Enterprise value to operating income (×) | Not available |
| Price to earnings (×) | Not meaningful |
| Price to book value (×) | 1.8 |
| Free-cash-flow yield (%) | 4.4 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 16.8% of shares outstanding sold short, 8.4 days of average trading to cover, −7.3% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $0 |
| 12 monthsfrom | $0 | $0 |
The thesis
Certara's software sales have re-accelerated, but the shares already trade near the targets analysts raised after the report. That makes them more likely to lag the S&P 500 over the next three months. The fourth-quarter report and first 2027 outlook settle whether services recover and whether growth supports the price. Certara has not announced the report date, which is estimated for around 25 February 2027.
Certara reported third-quarter results on 5 November 2026. Its 8-K shows software revenue up 11% to $48.8 million and software bookings up 15% to $46.9 million. Services bookings fell 5%. The cost program still has no updated savings figure, and the top of the 2026 adjusted earnings per share (EPS) range came down to $0.34 from $0.36.
The shares closed at $11.73 on 11 November 2026. That is below the $12 targets from Barclays and Jefferies and under UBS's $13, and all three firms rate the stock at a neutral equivalent. The price already reflects the software re-acceleration those firms cited on 6 November 2026.
The view is wrong if the shares beat the S&P 500 over the next three months. It is also wrong if the next report shows services bookings growing again alongside a 2027 outlook of mid-single-digit revenue growth or better.
Bullish and bearish views on Certara, Inc.
The bull case on Certara, Inc. (CERT), in brief: software growth accelerated in the quarter. The bear case: services are still shrinking.
Bull case
- Software growth accelerated in the quarter. Third-quarter software revenue rose 11% from $43.8 million a year earlier, per the company's release of 5 November 2026. That compares with 4% growth in the second quarter, per the 4 August 2026 release. Trailing-twelve-month software bookings reached $202.4 million, up 8%.
- Revenue beat and margins widened. Benzinga reported on 5 November 2026 that revenue of $94.9 million, up 4%, beat the $92.867 million estimate. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) rose 6% to $30.2 million. That is a 31.8% margin, against 31.5% a year earlier.
- Analysts raised targets after the report. MarketBeat reported on 6 November 2026 that Barclays raised its target to $12 from $9. Investing.com reported that UBS raised its target to $13 from $10, citing evidence that Certara "may be at the start of a software re-acceleration", and that Jefferies raised its target to $12 from $7.45.
- Regulators are moving toward simulation. Chief Executive Jon Resnick said on the 5 November 2026 call that a September Food and Drug Administration (FDA) rule replaced "animal test" with non-clinical tests. He also cited new contracts at the FDA's drug and biologics centers.
- Cash funds continued repurchases. Certara ended 30 September 2026 with $214.9 million of cash and $288.2 million of long-term debt, per its 8-K. It spent $57.4 million on share repurchases in the first nine months of 2026.
Bear case
- Services are still shrinking. Third-quarter services revenue fell 2% to $46.1 million and services bookings fell 5% to $45.6 million. In the second quarter they fell 3% and 6%. Management said on 5 November 2026 that the return to a specialist-led sales model will take time to show up in bookings and revenue.
- Software revenue did not grow sequentially. Software revenue was $48.8 million in both the second and third quarters of 2026, per the company's releases. The faster year-over-year rate reflects a weak $43.8 million quarter a year earlier.
- The EPS range and fourth-quarter pace disappoint. The new $0.31–$0.34 range tops out at the $0.34 estimate Benzinga cited on 5 November 2026. On the call, the interim chief financial officer (CFO) described 29%–31% as the appropriate fourth-quarter adjusted EBITDA margin range, below the third quarter's 31.8%.
- Savings remain unquantified. The 8-K cites only "initial benefits" from first-half actions. Resnick said on the call that run-rate savings have grown beyond the earlier $12–13 million but gave no new figure. Third-quarter costs included $4.8 million of reorganization, severance and executive recruiting expense.
- The price sits near the neutral-rated targets. MarketBeat showed an average Hold rating and a $9.73 average target on 6 November 2026, below the 11 November 2026 close. UBS kept its Neutral rating on 6 November 2026 because of uncertainty about services growth.
Price setup
The shares closed at $11.73 on 11 November 2026. That is 7.0% below the 52-week intraday high of $12.61, set on 6 November 2026, the session after the report. The shares rose 43.9% over three months from an $8.15 close on 13 August 2026. The 52-week closing low was $4.48 on 15 May 2026.
The report moved the price. The close went from $11.09 on 4 November 2026 to $12.18 on 5 November 2026, the day of the report. The highest close since then was $12.22 on 9 November 2026. The shares then slipped to $12.12 on 10 November 2026 and $11.73 on 11 November 2026.
Both main averages sit well below the price. As of 11 November 2026, the 50-day moving average was $9.56 and the 200-day moving average was $7.34. The post-report closing high of $12.22 and the 52-week intraday high of $12.61 are the levels the shares would need to clear to show buying beyond what the target raises priced in.
Catalysts ahead
- ~25 February 2027 (est.): Fourth-quarter and full-year 2026 report; Certara has not announced the date. It tests the 2%–3% revenue growth and $0.31–$0.34 EPS ranges and shows whether services bookings recover. It is also the likely venue for a first 2027 outlook.
What would change the view
A daily close above $13.61, above the 6 November 2026 52-week high, would show the shares leading the S&P 500 and prove this call wrong. So would a fourth-quarter report with services bookings up year over year and a 2027 outlook of mid-single-digit revenue growth or better.
What it trades with
The shares depend on pharmaceutical and biotech research and development spending. UBS and TD Cowen analysts asked about that spending on the 5 November 2026 call. Resnick said the end market "looks strong" and made no distinction between software and services demand. Simulations Plus is the closest listed biosimulation peer, so its results give a read on the same customer budgets. Software growth links the shares to investor demand for software stocks. The services decline keeps part of the business tied to customers' project activity.
The evidence, claim by claim (8)
- Q3 2026 revenue $94.9M, up 4%; software revenue $48.8M, up 11%; services revenue $46.1M, down 2%. Certara Q3 2026 earnings release (Form 8-K) · as of
- Q3 2026 software bookings $46.9M, up 15%; services bookings $45.6M, down 5%; total bookings $92.5M, up 4%. Certara Q3 2026 earnings release (Form 8-K) · as of
- Q3 2026 adjusted EBITDA $30.2M, up 6%, a 31.8% margin against 31.5% a year earlier; adjusted diluted EPS $0.09, flat year over year. Certara Q3 2026 earnings release (Form 8-K) · as of
- 2026 guidance set at 2%–3% revenue growth and $0.31–$0.34 adjusted diluted EPS, with the EPS range previously $0.31–$0.36. Certara Q3 2026 earnings release; Benzinga · as of
- Cash was $214.9M at 30 September 2026, long-term debt $288.2M, and share repurchases totaled $57.4M over the first nine months of 2026. Certara Q3 2026 earnings release (Form 8-K) · as of
- UBS kept a Neutral rating and raised its target to $13 from $10; Jefferies raised its target to $12 from $7.45 at Hold. Investing.com · as of
- Barclays kept an Equal-Weight rating and raised its target to $12 from $9; MarketBeat showed an average Hold rating and a $9.73 average target. MarketBeat · as of
- Software revenue was $48.8M in both Q2 2026 and Q3 2026, with Q2 growth of 4% and Q3 growth of 11% year over year. Certara Q2 and Q3 2026 earnings releases (Form 8-K) · as of
Sources
- Certara, Inc. - Form 8-K - FY2026 · sec.gov ·
- Certara (CERT) Q3 2026 Earnings Call Transcript · fool.com ·
- Certara Q3 Earnings Call Highlights · marketbeat.com ·
- UBS raises Certara stock price target on software demand strength · investing.com
- Barclays Issues Positive Forecast for Certara (NASDAQ:CERT) Stock Price · marketbeat.com ·
- Jefferies raises Certara stock price target to $12 on software growth · investing.com
- Certara, Inc. - Form 8-K - FY2026 · sec.gov
Related · shared themes
AZTA
Azenta
Azenta is more likely to beat the S&P 500 over three months because its fiscal 2027 plan, issued 10 November 2026, adds 3% to 5% organic…
AVTR
Avantor
Avantor's lab-supply volumes are growing again, with Q3 2026 organic growth of 5.2% and a raised FY2026 outlook, but distribution margins…
CRL
Charles River Laboratories International
Charles River Laboratories' preclinical recovery passed its 4 November 2026 test with 4.7% organic growth, a 1.09 book-to-bill and raised…
EMBC
Embecta
Embecta Corp. shares are modestly favored to beat the S&P 500 as higher margins and debt repayment outweigh shrinking U.S. pen-needle…
See also · stocks to watch