Schrödinger, Inc. (SDGR) Stock Analysis

Why this analysis is different

• A sector-relative MoonshotScore — five pillars (business quality, financial safety, valuation, growth durability, momentum) re-ranked nightly against the full universe of US-listed common stocks.
• An AI Council read across up to eight perspectives — value, macro, quantitative, and momentum lenses — that shows where they disagree instead of averaging the tension away.
• Figures come straight from FMP and Yahoo Finance filings data. The AI writes the narrative around the numbers — it never edits the numbers.

Schrödinger, Inc. (SDGR) Healthcare & Pipeline Overview

Schrödinger, Inc. delivers a physics-based software platform that facilitates the discovery of novel molecules for drug development and materials science. With a dual focus on software sales and internal drug discovery programs, Schrödinger serves biopharmaceutical and industrial companies, academic institutions, and government laboratories worldwide, positioning itself in the competitive healthcare information services sector.

What Is the Investment Thesis for SDGR?

Schrödinger, Inc. presents a notable research candidate within the healthcare information services sector. The company's physics-based software platform for drug discovery and materials science offers a unique value proposition, driving revenue growth in the Software segment. The Drug Discovery segment provides potential upside through the development of novel therapeutics. However, the company's negative profit margin of -40.6% indicates ongoing investments in research and development, which may impact near-term profitability. Key catalysts include advancements in the company's drug discovery pipeline and increased adoption of its software platform. Investors should monitor the company's ability to manage its operating expenses and achieve profitability in the long term.

Based on FMP financials and quantitative analysis

SDGR Key Highlights

Market Cap of $1.40B reflects investor valuation of Schrödinger's future growth potential in the drug discovery and materials science sectors.

• Gross Margin of 55.3% indicates strong pricing power and efficient software delivery, contributing to overall profitability.
• Operating in two segments, Software and Drug Discovery, provides diversified revenue streams and growth opportunities.
• Serves biopharmaceutical and industrial companies, academic institutions, and government laboratories worldwide, demonstrating a broad customer base and market reach.
• Beta of 1.62 suggests higher volatility compared to the market, reflecting the company's growth stage and sensitivity to market fluctuations.

Who Are SDGR's Competitors?

SDGR is benchmarked below against 8 industry peers on price, market cap, and our AI MoonshotScore.

AI Score by Stock Expert AI · Price data: FMP / Yahoo Finance

What Are SDGR's Key Strengths?

Proprietary physics-based software platform

• Expertise in drug discovery and materials science
• Established customer base
• Strong gross margin

What Are SDGR's Weaknesses?

Negative profit margin

• High operating expenses
• Reliance on research and development
• Limited commercialized products

What Could Drive SDGR Stock Higher?

Advancement of preclinical programs into clinical trials.

• Expansion of strategic partnerships with pharmaceutical companies.
• Increased adoption of the software platform by academic institutions.
• Launch of new software features and capabilities.

What Are the Key Risks for SDGR?

Negative return on equity (-16.4%) — the business is not currently generating profit on shareholder capital.

• Weak fundamentals — a Piotroski F-Score of 3/9 flags soft profitability, leverage or efficiency.
• Failure to obtain regulatory approvals for drug candidates.
• Intense competition from other software providers.
• Technological advancements by competitors.
• Economic downturns impacting customer spending.

What Are the Growth Opportunities for SDGR?

• Expansion into New Therapeutic Areas: Schrödinger can leverage its software platform to target new therapeutic areas, such as oncology, immunology, and neurology. The global oncology market is projected to reach $286.6 billion by 2030, presenting a significant opportunity for Schrödinger to develop and commercialize new drug candidates. By focusing on areas with high unmet medical needs, Schrödinger can drive revenue growth and enhance its market position. The timeline for this expansion is ongoing, with continuous research and development efforts focused on identifying and validating new drug targets.
• Strategic Partnerships and Collaborations: Schrödinger can pursue strategic partnerships and collaborations with pharmaceutical companies, biotechnology firms, and academic institutions to accelerate drug discovery and development. Collaborations can provide access to new technologies, expertise, and funding, enabling Schrödinger to expand its pipeline and reduce its financial risk. The pharmaceutical industry is increasingly relying on external collaborations to drive innovation, creating a favorable environment for Schrödinger to forge partnerships. These partnerships can be initiated and expanded on an ongoing basis.
• Increased Adoption of Cloud-Based Solutions: Schrödinger can capitalize on the growing demand for cloud-based solutions in the life sciences industry by offering its software platform as a cloud service. Cloud-based solutions provide greater flexibility, scalability, and cost-effectiveness, making them attractive to a wider range of customers. The global cloud computing market in healthcare is projected to reach $94.77 billion by 2029. By transitioning to a cloud-based model, Schrödinger can expand its customer base and generate recurring revenue streams. This transition is an ongoing process, with continuous investments in cloud infrastructure and software development.
• Penetration of the Materials Science Market: Schrödinger can leverage its software platform to expand its presence in the materials science market, which is experiencing rapid growth due to increasing demand for advanced materials in various industries. The global advanced materials market is projected to reach $115.54 billion by 2028. By targeting customers in the aerospace, automotive, and electronics industries, Schrödinger can diversify its revenue streams and reduce its reliance on the pharmaceutical market. This market penetration is an ongoing effort, with continuous development of new software features and applications for materials science.
• Advancements in Artificial Intelligence and Machine Learning: Schrödinger can integrate artificial intelligence (AI) and machine learning (ML) technologies into its software platform to enhance its predictive capabilities and accelerate drug discovery. AI and ML can be used to analyze large datasets, identify potential drug candidates, and optimize drug properties. The global AI in drug discovery market is projected to reach $4.02 billion by 2028. By incorporating AI and ML into its platform, Schrödinger can provide its customers with more powerful tools for drug discovery and development. These advancements are ongoing, with continuous research and development efforts focused on integrating AI and ML into the software platform.

What Are SDGR's Competitive Advantages?

• Proprietary physics-based algorithms
• Integrated software platform
• Established customer base
• Expertise in drug discovery and materials science

What Does SDGR Do?

Schrödinger, Inc., founded in 1990 and headquartered in New York City, is a pioneer in developing physics-based software for drug discovery and materials applications. The company's core offering is a software platform that enables researchers to simulate, predict, and optimize the properties of molecules, accelerating the discovery process. Schrödinger operates through two segments: Software and Drug Discovery. The Software segment generates revenue by selling licenses to its software suite, which is used by biopharmaceutical companies, industrial organizations, academic institutions, and government labs. The Drug Discovery segment focuses on building a portfolio of preclinical and clinical programs, both internally and through collaborations, aiming to develop novel therapeutics. Schrödinger's software is used in a wide range of applications, including drug design, materials science, and chemical engineering. The company's solutions help researchers to reduce the time and cost associated with traditional experimental methods, improving the efficiency of research and development efforts. Schrödinger serves a global customer base, with a significant presence in North America, Europe, and Asia. The company's competitive advantage lies in its proprietary physics-based algorithms and its integrated software platform, which provides a comprehensive solution for molecular design and simulation.

What Products and Services Does SDGR Offer?

• Develops physics-based software for molecular simulation.
• Offers solutions for drug discovery and materials science.
• Enables researchers to design and optimize molecules.
• Provides software for predicting molecular properties.
• Facilitates virtual screening of drug candidates.
• Supports preclinical and clinical drug development.
• Offers collaborative drug discovery programs.

How Does SDGR Make Money?

• Sells software licenses to biopharmaceutical and industrial companies.
• Generates revenue from collaborative drug discovery programs.
• Develops and commercializes novel therapeutics.

What Industry Does SDGR Operate In?

Schrödinger, Inc. operates within the healthcare information services industry, which is experiencing rapid growth due to increasing demand for advanced technologies in drug discovery and development. The industry is characterized by intense competition, with companies offering a range of software and services for molecular design, simulation, and data analysis. Schrödinger differentiates itself through its physics-based approach, which provides a more accurate and predictive modeling of molecular properties. The company competes with other software providers, as well as with internal research and development efforts within pharmaceutical companies. The healthcare information services market is expected to continue to grow, driven by advancements in artificial intelligence, machine learning, and cloud computing.

Who Are SDGR's Key Customers?

• Biopharmaceutical companies
• Industrial organizations
• Academic institutions
• Government laboratories

Over the past six months, Schrödinger, Inc. insiders filed 29 SEC Form 4 transactions — 8 sales and 21 purchases. On net that is roughly 62K shares acquired (about $613K) — insiders putting money in tends to read as conviction.

Schrödinger, Inc. has beaten Wall Street's EPS estimate in 5 of its last 8 reported quarters — more hits than misses. Reported results have landed about 65.3% above estimates on average.

Schrödinger, Inc.'s Piotroski F-Score is 3/9, a 9-point checklist of profitability, leverage and efficiency — flagging fundamental weakness worth scrutiny. Its Altman Z-Score of 1.91 places it in the grey zone, a middle ground that warrants monitoring.

Return on equity for Schrödinger, Inc. stands at -16.4%, a gauge of how efficiently it converts shareholder capital into profit. Return on assets is -8.5%, showing how much profit it generates from its asset base. Its free cash flow yield is -2.3%, a gauge of the cash the business throws off relative to its market value. A current ratio of 2.71 indicates the company holds enough short-term assets to cover its near-term obligations. Its earnings yield is -3.8%, the inverse of the P/E and a quick read on earnings relative to price.

Schrödinger, Inc. (SDGR) Valuation Context

Valued at $1.40B, SDGR is classified as a small-cap stock. Analyst price targets span from $19.00 to $19.00, with a consensus of $19.00. At the current price of $18.80, that implies approximately 1% upside potential. Relative to its peer group, SDGR's quantitative score of 30/100 is below the peer average of 59/100.

SDGR Revenue & Earnings Trend

In Q2 FY2026, SDGR generated $58.9M in top-line revenue, marking a sequential increase of 0.5%. The company recorded net income of $6.0M, with diluted EPS of $0.08. Quarter-over-quarter revenue has been mixed, typical for a small-cap company operating in Healthcare. Across the four most recent quarters, SDGR averaged $-0.18 in diluted EPS.

Company Profile

Schrödinger, Inc. operates in the Software - Application industry within the Technology sector. It is headquartered in New York, US. The company is led by CEO Ramy Farid. SDGR has traded publicly since 2020.

SDGR Financials

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SDGR Analyst Consensus

SDGR MoonshotScore

Common Questions About SDGR (Healthcare)

Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.

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