Comparing SPS Commerce (NASDAQ:SPSC) & Certara (NASDAQ:CERT)

Certara (NASDAQ:CERTGet Rating) and SPS Commerce (NASDAQ:SPSCGet Rating) are both mid-cap medical companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, valuation, dividends, earnings, risk, analyst recommendations and institutional ownership.

Earnings & Valuation

This table compares Certara and SPS Commerce’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Certara $286.10 million 9.85 -$13.27 million ($0.08) -220.38
SPS Commerce $385.28 million 9.80 $44.60 million $1.27 82.27

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Certara and SPS Commerce, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Certara 0 1 3 0 2.75
SPS Commerce 0 1 6 0 2.86

Certara currently has a consensus target price of $30.75, suggesting a potential upside of 74.42%. SPS Commerce has a consensus target price of $168.86, suggesting a potential upside of 61.62%. Given Certara’s higher probable upside, research analysts clearly believe Certara is more favorable than SPS Commerce.

Profitability

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

Net Margins Return on Equity Return on Assets
Certara -4.02% 3.56% 2.43%
SPS Commerce 11.74% 10.33% 8.20%

Insider & Institutional Ownership

52.1% of Certara shares are held by institutional investors. Comparatively, 98.5% of SPS Commerce shares are held by institutional investors. 4.0% of Certara shares are held by insiders. Comparatively, 1.3% of SPS Commerce shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

Certara has a beta of 1.52, indicating that its stock price is 52% more volatile than the S&P 500. Comparatively, SPS Commerce has a beta of 0.85, indicating that its stock price is 15% less volatile than the S&P 500.

Summary

SPS Commerce beats Certara on 10 of the 14 factors compared between the two stocks.

About Certara (Get Rating)

Certara, Inc. provides software products and technology-enabled services to customers for biosimulation in drug discovery, preclinical and clinical research, regulatory submissions, and market access. It offers medicines to patients using biosimulation software, technology, and services to transform drug discovery and development. The company also provides related technology-enabled services to guide its customers' new drugs through the regulatory submission process and into the market. Its technology-enabled services include mechanistic biosimulation, empirical biosimulation, drug development and regulatory strategy, clinical pharmacology, model-based meta-analysis, regulatory writing and medical communications, regulatory operations, and market access. Further, company offers software, comprising mechanistic biosimulation platform, empirical PK/PD biosimulation platform, data standardization and compliance software, scientific informatics platform, clinical outcomes databases for biosimulation, authoring and management of regulatory submissions platform, and market access communication platform. The company serves biopharmaceutical companies, and academic and government institutions. It has operations in the United States, Canada, Spain, Luxembourg, Portugal, the United Kingdom, Germany, France, the Netherlands, Denmark, Switzerland, Italy, Poland, Japan, the Philippines, India, Australia, and China. Certara Inc. was founded in 2008 and is headquartered in Princeton, New Jersey.

About SPS Commerce (Get Rating)

SPS Commerce, Inc. provides cloud-based supply chain management solutions worldwide. It offers solutions through the SPS Commerce, a cloud-based platform that enhances the way retailers, suppliers, grocers, distributors, and logistics firms manage and fulfill omnichannel orders, optimize sell-through performance, and automate new trading relationships. The company also provides Fulfillment solution that provides fulfillment automation and replaces or augments an organization's existing staff and trading partner electronic communication infrastructure by enabling easy compliance with retailers' rulebooks, automatic, and digital exchange of information among numerous trading partners through various protocols, and greater visibility into the journey of an order; and Analytics solution, which consists of data analytics applications that enables customers to enhance their visibility across supply chains through greater analytics capabilities. In addition, it offers various complimentary products, such as assortment product, which enables accurate order management and rapid fulfillment; and community product that accelerates vendor onboarding and ensures trading partner adoption of new supply chain requirements. The company was formerly known as St. Paul Software, Inc. and changed its name to SPS Commerce, Inc. in May 2001. SPS Commerce, Inc. was incorporated in 1987 and is headquartered in Minneapolis, Minnesota.

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