Critical Survey: Certara (NASDAQ:CERT) vs. GoodRx (NASDAQ:GDRX)

GoodRx (NASDAQ:GDRX) and Certara (NASDAQ:CERT) are both small-cap healthcare companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, risk, profitability, dividends and valuation.

Analyst Recommendations

This is a breakdown of recent ratings for GoodRx and Certara, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GoodRx	3	6	4	0	2.08
Certara	1	6	4	1	2.42

GoodRx presently has a consensus target price of $4.14, indicating a potential upside of 10.89%. Certara has a consensus target price of $8.28, indicating a potential upside of 3.47%. Given GoodRx’s higher possible upside, analysts clearly believe GoodRx is more favorable than Certara.

Earnings & Valuation

This table compares GoodRx and Certara”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GoodRx	$796.85 million	1.60	$30.44 million	$0.04	93.25
Certara	$418.84 million	2.91	-$1.60 million	($0.45)	-17.78

GoodRx has higher revenue and earnings than Certara. Certara is trading at a lower price-to-earnings ratio than GoodRx, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

GoodRx has a beta of 1.6, meaning that its share price is 60% more volatile than the S&P 500. Comparatively, Certara has a beta of 1.44, meaning that its share price is 44% more volatile than the S&P 500.

Insider & Institutional Ownership

63.8% of GoodRx shares are owned by institutional investors. Comparatively, 74.0% of Certara shares are owned by institutional investors. 5.9% of GoodRx shares are owned by company insiders. Comparatively, 1.1% of Certara shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares GoodRx and Certara’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GoodRx	2.07%	7.22%	2.53%
Certara	-16.75%	3.86%	2.65%

Summary

GoodRx beats Certara on 9 of the 14 factors compared between the two stocks.

About GoodRx

GoodRx Holdings, Inc., together with its subsidiaries, offers information and tools that enable consumers to compare prices and save on their prescription drug purchases in the United States. The company operates a price comparison platform that provides consumers with curated, geographically relevant prescription pricing, and access to negotiated prices. It also offers other healthcare products and services, including subscriptions, and pharma manufacturer solutions, as well as telehealth services through the GoodRx Care platform. It serves pharmacy benefit managers who manage formularies and prescription transactions, including establishing pricing between consumers and pharmacies. The company was founded in 2011 and is headquartered in Santa Monica, California.

About Certara

Certara, Inc., together with its subsidiaries, provides software products and technology-enabled services to customers for biosimulation in drug discovery, preclinical and clinical research, regulatory submissions, and market access in the United States and internationally. It offers solutions for model-informed drug development, as well as biosimulation solution used to predict both pharmacokinetics and pharmacodynamics. The company provides Simcyp Simulator, a mechanistic biosimulation platform mechanistic biosimulation investigational new drug and translational stages; Simcyp Biopharmaceutics, used to identify and refine drug formulations; and Simcyp Secondary Intelligence which integrates toxicology with quantitative analysis of networks of molecular and functional biological changes to identify drug toxicity and adverse drug reactions. In addition, it offers Phoenix WinNonlin, a platform for non-compartmental analysis, pharmacokinetic/pharmacodynamic, and toxicokinetic; phoenix hosted, that provides a secured and validated certara amazon web services workspace; Phoenix NLME, a population modeling and simulation software for nonlinear mixed effects models; and pirana modeling workbench. Further, the company provides pinnacle 21, a cloud-based platform for clinical data automation, standardization, and validation; Pinnacle 21 Data Exchange, used to define data standards and specifications; and Metadata Repository, to enable study design using controlled and standardized data. It serves life sciences companies, biopharmaceutical companies, research organizations, academic institutions, and global regulators, as well as animal health, crop science, bio science, medical devices, and public sector industries. Certara Inc. was founded in 2008 and is headquartered in Princeton, New Jersey.