Comparing Certara (NASDAQ:CERT) & Freshworks (NASDAQ:FRSH)

Certara (NASDAQ:CERT) and Freshworks (NASDAQ:FRSH) are both medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, dividends, profitability, risk and valuation.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Certara	-21.64%	3.03%	2.06%
Freshworks	-15.72%	-9.08%	-6.67%

Insider and Institutional Ownership

74.0% of Certara shares are held by institutional investors. Comparatively, 75.6% of Freshworks shares are held by institutional investors. 2.4% of Certara shares are held by insiders. Comparatively, 19.2% of Freshworks shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Risk & Volatility

Certara has a beta of 1.52, meaning that its share price is 52% more volatile than the S&P 500. Comparatively, Freshworks has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500.

Valuation and Earnings

This table compares Certara and Freshworks’ revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Certara	$354.34 million	5.56	-$55.36 million	($0.39)	-31.41
Freshworks	$652.94 million	5.35	-$137.44 million	($0.40)	-29.20

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

Analyst Ratings

This is a summary of current recommendations for Certara and Freshworks, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Certara	0	7	2	0	2.22
Freshworks	0	6	9	0	2.60

Certara presently has a consensus target price of $17.79, indicating a potential upside of 45.19%. Freshworks has a consensus target price of $19.40, indicating a potential upside of 66.10%. Given Freshworks’ stronger consensus rating and higher possible upside, analysts clearly believe Freshworks is more favorable than Certara.

Summary

Freshworks beats Certara on 8 of the 14 factors compared between the two stocks.

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.

About Freshworks

Freshworks Inc., a software development company, provides software-as-a-service products worldwide. It offers Freshworks Customer Service Suite, which provides automated, personalized self-service on various channels, including web, chat, mobile messaging, email, and social; Freshdesk, a ticketing-centric customer service solution; Freshsuccess, a customer success solution; and Freshchat that provides agents with a modern conversational experience to proactively engage customers across digital messaging channels. The company also provides Freshsales, an advanced and user-friendly sales automation solution; Freshmarketer, a marketing automation solution for businesses to redefine their marketing strategies; Freshsales Suite, which offers businesses a unified platform that facilitates cohesive engagement and detailed tracking of customers throughout their entire buying journey; Freshservice that offers virtual agents to help employees resolve issues, make requests, and answer questions without contacting the service desk; and Freshservice for Business Teams, which provides a unified employee service experience while ensuring the secure separation of departmental data. In addition, it offers Freshping to monitor website's availability and get multichannel alerts if the website goes down; Freshstatus, which allows businesses to create a custom branded website status page for internal or external viewing to communicate website uptime and availability; and Freshsurvey to measure net promoter scores and other satisfaction metrics directly within Freshworks products. The company was formerly known as Freshdesk Inc. and changed its name to Freshworks Inc. in June 2017. Freshworks Inc. was incorporated in 2010 and is headquartered in San Mateo, California.