CERT
Certara, Inc.
$9.13
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 120.1% above fair value
You pay
$9.13
Bear
$4.15
Fair
$4.15
Bull
$4.34
Bear
$4.15
-54.6%
3% stage 1 growth, 12% discount
Fair
$4.15
-54.6%
3% stage 1 growth, 12% discount
Bull
$4.34
-52.4%
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
30.4x
Market is pricing in (growth)
16.6%
vs 3.0% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (16 analysts)
$8.50
Divergence from AlphaVal
51%
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 $8.50 (from 16 analysts). Our estimate is 51% 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