Is Certara Inc. (CERT) positioned for future growth?

Certara Inc. (NASDAQ: CERT) stock fell -1.44% on Tuesday to $18.46 against a previous-day closing price of $18.73. With 0.6 million shares changed hands, the volume of the stock remained lighter than its average volume of 0.78 million shares. During the session, the Health Information Services company that operates in wider Healthcare sector, reached to the highest price of $19.11 whereas the lowest price it dropped to was $18.46. The 52-week range on CERT shows that it touched its highest point at $28.62 and its lowest point at $10.60 during that stretch. It currently has a 1-year price target of $20.81.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of CERT was up-trending over the past week, with a rise of 3.88%, but this was up by 12.97% over a month. Three-month performance surged to 62.93% while six-month performance fell -16.43%. The stock lost -27.81% in the past year, while it has gained 14.87% so far this year. A look at the trailing 12-month EPS for CERT yields -0.03 with Next year EPS estimates of 0.53. For the next quarter, that number is 0.13. This implies an EPS growth rate of 76.10% for this year and 19.05% for next year.

Float and Shares Shorts:

At present, 157.14 million CERT shares are outstanding with a float of 152.81 million shares on hand for trading. On Oct 13, 2022, short shares totaled 1.91 million, which was 1.19% higher than short shares on Sep 14, 2022. In addition to Dr. William F. Feehery Ph.D. as the firm’s CEO & Director, Mr. M. Andrew Schemick serves as its Chief Financial Officer.

Institutional Ownership:

Through their ownership of 86.29% of CERT’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 46.87% of CERT, in contrast to 33.28% held by mutual funds. Shares owned by individuals account for 26.23%. As the largest shareholder in CERT with 6.58% of the stake, The Vanguard Group, Inc. holds 10,506,000 shares worth 10,506,000. A second-largest stockholder of CERT, Baillie Gifford & Co., holds 10,223,809 shares, controlling over 6.40% of the firm’s shares. William Blair Investment Manageme is the third largest shareholder in CERT, holding 5,262,935 shares or 3.30% stake. With a 2.30% stake in CERT, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 3,675,092 shares are owned by the mutual fund manager. The Vanguard Small Cap Index Fund, which owns about 1.93% of CERT stock, is the second-largest Mutual Fund holder. It holds 3,085,657 shares valued at 49.59 million. ClearBridge Small Cap Growth Fund holds 1.67% of the stake in CERT, owning 2,658,521 shares worth 42.72 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for CERT since 9 analysts follow the stock currently. There are 6 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 2 believe that the stock is worth HOLDING, 1 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With CERT analysts setting a high price target of $26.00 and a low target of $19.00, the average target price over the next 12 months is $21.63. Based on these targets, CERT could surge 40.85% to reach the target high and rise by 2.93% to reach the target low. Reaching the average price target will result in a growth of 17.17% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. CERT will report FY 2022 earnings on 02/28/2024. Analysts have provided yearly estimates in a range of $0.47 being high and $0.43 being low. For CERT, this leads to a yearly average estimate of $0.44. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Certara Inc. surprised analysts by -$0.02 when it reported $0.10 EPS against a consensus estimate of $0.12. The surprise factor in the prior quarter was -$0.01. Based on analyst estimates, the high estimate for the next quarter is $0.14 and the low estimate is $0.11. The average estimate for the next quarter is thus $0.13.

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