Financial analysis: ServiceNow (NYSE: NOW) and Certara (NASDAQ: CERT)


ServiceNow (NYSE:NOW – Get Rating) and Certara (NASDAQ:CERT – Get Rating) are both IT and technology companies, but which is the better stock? We’ll compare the two companies based on earnings strength, institutional ownership, risk, analyst recommendations, valuation, dividends and profitability.

Analyst Notes

This is a summary of current ratings and price targets for ServiceNow and Certara, as reported by MarketBeat.

Sales Ratings Hold odds Buy reviews Strong buy odds Rating
ServiceNow 2 1 27 0 2.83
Certara 0 1 5 0 2.83

ServiceNow currently has a consensus target price of $621.80, suggesting a potential upside of 39.18%. Certara has a consensus target price of $29.67, suggesting a potential upside of 36.27%. Given ServiceNow’s possible higher upside, equity research analysts clearly believe that ServiceNow is more favorable than Certara.

Valuation and benefits

This table compares the revenue, earnings per share (EPS), and valuation of ServiceNow and Certara.

Gross revenue Price/sales ratio Net revenue Earnings per share Price/earnings ratio
ServiceNow $5.90 billion 15.19 $230.00 million $1.10 406.15
Certara $286.10 million 12.16 -$13.27 million ($0.08) -272.13

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

Profitability

This table compares the net margins, return on equity, and return on assets of ServiceNow and Certara.

Net margins Return on equity return on assets
ServiceNow 3.56% 8.66% 3.10%
Certara -4.02% 3.56% 2.43%

Risk and Volatility

ServiceNow has a beta of 1.03, which means its stock price is 3% more volatile than the S&P 500. Comparatively, Certara has a beta of 1.03, which means its stock price is 3% more volatile than the S&P 500.

Institutional and Insider Ownership

87.2% of ServiceNow shares are held by institutional investors. Comparatively, 52.1% of Certara shares are held by institutional investors. 0.3% of ServiceNow shares are held by insiders. Comparatively, 4.0% of Certara shares are held by insiders. Strong institutional ownership is an indication that endowments, large fund managers, and hedge funds believe a company will outperform the market over the long term.

Summary

ServiceNow beats Certara on 11 of the 12 factors compared between the two stocks.

About Service Now

(Get an evaluation)

ServiceNow, Inc. provides enterprise cloud computing solutions that define, structure, consolidate, manage and automate services for businesses worldwide. It operates the Now platform for workflow automation, artificial intelligence, machine learning, robotic process automation, performance analytics, electronic service catalogs and portals, configuration management, data benchmarking, encryption, and collaboration and development tools. The company also provides information technology (IT) service management applications; Suite of IT service management products for enterprise employees, customers, and partners; Suite of IT business management products; IT operations management product that connects a customer’s physical and cloud computing infrastructure; IT asset management to automate IT asset lifecycles; and security operations that connect with internal and third parties. In addition, it offers a governance, risk management and compliance product to manage risk and resilience; human resources, legal and workplace service delivery products; safe workplace applications; customer service management product; and field service management applications. Additionally, it provides the App Engine product; IntegrationHub allows the application to extend workflows; and professional and industry solutions and customer support services. It serves government, financial services, healthcare, telecommunications, manufacturing, IT services, technology, oil and gas, education and consumer products through a sales team direct and resale partners. It has a strategic partnership with Celonis to help customers identify and prioritize processes suitable for automation. The company was formerly known as Service-now.com and changed its name to ServiceNow, Inc. in May 2012. The company was founded in 2004 and is headquartered in Santa Clara, California.

About Certara

(Get an evaluation)

Certara, Inc. provides software products and technology services to customers for biosimulation in drug discovery, preclinical and clinical research, regulatory submissions, and market access. It brings medicines to patients using biosimulation software, technologies and services to transform drug discovery and development. The company also provides related technology services to guide its customers’ new drugs through the regulatory submission process and into market. Its technology 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 access to market. In addition, the Company offers software, including mechanistic biosimulation platform, empirical PK/PD biosimulation platform, data normalization and compliance software, scientific computing platform, databases of clinical results for biosimulation, the creation and management of the regulatory submissions platform and a market access communication platform. The company serves biopharmaceutical companies and academic and government institutions. It is present in the United States, Canada, Spain, Luxembourg, Portugal, 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 based in Princeton, New Jersey.



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Sarah J. Greer