CERT
Certara, Inc.
$8.41
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 102.8% above fair value
You pay
$8.41
Bear
$4.15
Fair
$4.15
Bull
$4.34
Bear
$4.15
-50.7%
3% stage 1 growth, 12% discount
Fair
$4.15
-50.7%
3% stage 1 growth, 12% discount
Bull
$4.34
-48.4%
4% stage 1 growth, 12% discount
Adjust Assumptions
3.0%
12.0%
3.0%
Key Value Driver
FCF growth rate (3% base case)
Terminal Value % of EV
28%
Implied Market Multiple
27.7x
Market is pricing in (growth)
15.3%
vs 3.0% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (16 analysts)
$7.75
Divergence from AlphaVal
46%
Summary
Using a two-stage FCF DCF with 3% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $4.15 per share.
Warnings
Wall Street's average price target is $7.75 (from 16 analysts). Our estimate is 46% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions