In a report released yesterday, Brendan Smith from TD Cowen maintained a Buy rating on Schrodinger, with a price target of $33.00.
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Brendan Smith has given his Buy rating due to a combination of factors that highlight Schrodinger’s strategic pivot and promising growth prospects. The company has shifted its focus away from advancing wholly owned assets into clinical development, opting instead to concentrate on discovery efforts. This strategic adjustment is expected to streamline operations and position the company for future growth.
Despite a slight pullback in FY25 software revenue guidance, Schrodinger’s Q3 performance exceeded expectations, driven by strong customer retention and growth in both hosted and on-premise contracts. The drug discovery segment also showed impressive year-over-year growth, supported by milestone payments. With the anticipated launch of the predictive tox platform and solid execution in their partner portfolio, Schrodinger is poised for a new era of growth, making it an attractive investment opportunity.