What happened

Certara (CERT -2.37%), which provides software and technology to help pharmaceutical companies and researchers accelerate drug development, saw its shares rise 37.7% this week. The stock closed last Friday at $10.65 a share and then opened on Monday sharply higher at $12.02. It hit its weekly high at $15.38 on Friday, before falling a bit to close the week at $14.65. The stock has a 52-week low of $10.60 and a 52-week high of $40.65 but is still down more than 48% so far this year.

So what

Certara picked a good week to have a strong earnings report. The company announced its third-quarter earnings on Monday, saying it had quarterly revenue of $84.7 million, up 15% year over year, and net income of $3.9 million, against a loss of $1.8 million in the same period last year. Earnings per share (EPS) was $0.02 compared to an EPS loss of $0.01 in the year-ago quarter.

The company also reiterated full-year guidance, saying it expected full-year revenue in a range of $325 million to $335 million, compared to $286.1 million last year, and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $112 million to $117 million. Last year, it had adjusted EBITDA of $103.7 million.

Certara, in its third-quarter earnings call, said it is seeing strong revenue growth from its newer biosimulation software products. The company said software revenue was $28.4 million, up 54% year over year, and had a 93% renewal rate. 

The company's stock also got a jolt when private equity firm Arsenal Capital Partners said Monday it was buying 30 million shares of Certara stock at $15 per share. Arsenal, which already owns 4% of the company, will own approximately 22% of the company after the purchase.

Now what

The market already was running higher this week thanks to lower inflation numbers, so Certara's announcements came at a time when investors might have been willing to spend a little more on stocks. Several analysts also raised their ratings for Certara after the announcements earlier in the week. The healthcare company will need to put together back-to-back strong quarters, however, to sustain its momentum.