TD Cowen sets Certara stock Buy rating, $16 target

Published 27/02/2025, 12:32
TD Cowen sets Certara stock Buy rating, $16 target

On Thursday, TD Cowen initiated coverage on Certara Inc . (NASDAQ: NASDAQ:CERT), currently trading at $12.33 with a market capitalization of nearly $2 billion, with a Buy rating and set a price target of $16.00. According to InvestingPro data, the stock has experienced significant volatility, with a 9% decline over the past week despite a 15.8% gain year-to-date. The research firm’s analysts highlighted the potential of Certara’s Model-Informed Drug Discovery (NASDAQ:WBD) and Development (MIDD) platform, emphasizing its breadth and evolution as factors that are not fully appreciated by the market.

The analysts believe that Certara is well-positioned for growth that exceeds the market average as biosimulation increasingly becomes a standard operating procedure in the industry. They also noted that Certara’s ongoing review of its low-margin regulatory services business could alleviate a significant concern among investors, potentially leading to a more favorable revenue mix that emphasizes software and margin expansion.

TD Cowen pointed out another competitive advantage for Certara in the form of its efforts to maximize artificial intelligence compatibility. According to the analysts, this strategic focus will further establish Certara as a leading player in the biosimulation space.

The endorsement from TD Cowen comes as Certara continues to innovate within the biosimulation field, which is gaining traction for its role in enhancing drug development processes. The firm’s analysts concluded their remarks by stating, "Maximizing AI compatibility is another competitive edge cementing CERT as key biosimulation player to watch. Initiate Buy/$16 PT." Based on InvestingPro’s Fair Value analysis, the stock appears undervalued at current levels. Subscribers can access 8 additional ProTips and a comprehensive Pro Research Report, which provides deep insights into Certara’s financial health, growth prospects, and market position among 1,400+ top US stocks.

In other recent news, Certara Inc. reported its fourth-quarter earnings for 2024, surpassing market expectations. The company achieved an earnings per share (EPS) of $0.15, exceeding the forecast of $0.12, and generated revenue of $100.4 million, which was above the anticipated $97.92 million. Certara attributed its 14% year-over-year revenue growth to its successful expansion in the biosimulation software market and the launch of new products. Despite this strong financial performance, the company’s stock experienced a minor decline in aftermarket trading. Looking ahead, Certara provided optimistic guidance for 2025, projecting total revenue between $415 million and $425 million, reflecting an 8-10% growth. The company expects contributions from its Chemexon integration to add $23-$25 million to revenue. Analyst firms have not reported any recent upgrades or downgrades for Certara’s stock. These developments highlight Certara’s ongoing efforts to innovate and expand its market presence.

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