We came across a bullish thesis on Certara, Inc. on Stock Picker’s Journey’s Substack by Gregg Jahnke. In this article, we will summarize the bulls’ thesis on CERT. Certara, Inc.’s share was trading at $9.53 as of August 6th. CERT’s forward P/E was 20.49 according to Yahoo Finance.
A clinical medical professional helping a patient while using an integrated health information technology software.
Certara (CERT), a leader in biosimulation, recently appeared on a low price-to-book screen, trading below 1.7x book and joining the bottom quintile of over 1,500 U.S.-based non-financial companies with over $1 billion in market cap. Though not initially seeking healthcare names, the author revisited Certara after noticing that prominent value hedge fund Select Equity bought over 1 million shares in the most recent quarter.
This was further supported by Wasatch Advisors, an admired growth investor, which owns 6% of the company and modestly increased its stake. Certara was taken public five years ago by William Blair, a boutique investment bank known for identifying niche, quality companies. A concise, clear presentation at the William Blair conference highlighted Certara’s business fundamentals: every major pharmaceutical company is a customer, either through software purchases or consulting engagements.
With the FDA’s phaseout of animal testing, Certara could be a major beneficiary as drugmakers seek alternative testing platforms. The company is modestly targeting 8–10% annual revenue growth despite a challenging pharmaceutical environment. Its CEO, a long-time executive formerly with DuPont and currently a board member at West Pharmaceutical, has been in place since Certara’s IPO, though the steep stock decline from $30 to $11 may raise questions about leadership longevity.
Encouragingly, the company initiated its first-ever stock buyback in April, authorizing up to $100 million and repurchasing $25 million last quarter. With a strong balance sheet and disciplined acquisitions, Certara presents an intriguing opportunity that merits deeper investigation, especially given its high-caliber shareholders and industry tailwinds.
Previously, we covered a bullish thesis on Schrödinger, Inc. by Unemployed Value Degen in September 2024, which highlighted the company’s AI-driven drug discovery model and long-term plan to generate recurring software and royalty revenue. The company’s stock price has depreciated by approximately 1.42% since our coverage. The thesis still stands as Schrödinger continues progressing toward its dual-revenue model. Gregg Jahnke shares a similar view but emphasizes Certara’s near-term biosimulation tailwinds.
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