Schrodinger (SDGR) AI Stock Analysis

• Market Cap: $1.24B
• Dividend Yield: N/A
• Average Volume (3M): 802.17K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.60
• Revenue Growth: 32.90%
• EPS Growth: 1.85%
• Country: US
• Employees: 891
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Healthcare Information Services
• EPS (TTM): -0.45
• Shares Outstanding: 64,500,510
• 10 Day Avg. Volume: 904,432
• 30 Day Avg. Volume: 802,169
• PEG Ratio: 0.01
• Price to Book (P/B): 3.33
• Price to Sales (P/S): 6.75
• P/FCF Ratio: -8.51
• Enterprise Value/Market Cap: 0.96
• Enterprise Value/Revenue: 4.62
• Enterprise Value/Gross Profit: 7.94
• Enterprise Value/Ebitda: -8.43
• 1Y Price Target: $21.83
• Price Target Upside: 30.02% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): -1.39
• Revenue Forecast (FY): $301.97M

• Rating: 44 Neutral
• Price Target: $18.00 ▲(7.21% Upside)

Schrodinger's overall stock score is primarily impacted by its financial performance challenges, including negative profitability and cash flow issues. Technical indicators suggest a bearish trend, further weighing on the score. Valuation is weak due to a negative P/E ratio and lack of dividends. The earnings call provided some positive insights into revenue growth and cost management, but these are overshadowed by the broader financial and market challenges.

Positive Factors

Recurring Software Revenue / Platform Stickiness

The subscription-based software model creates durable, repeatable revenue tied to an installed base. As customers embed the platform into R&D workflows, renewal and expansion dynamics support predictable revenue, high retention, and long-term customer lock-in that underpin sustainable business value.

Drug Discovery Partnerships Diversify Revenue

Rapid growth in collaboration-derived discovery revenue demonstrates the platform's ability to generate translatable assets. Partnerships offer milestone and royalty upside, diversifying income beyond software and providing non-linear, high-value revenue that can materially boost long-term cash generation if sustained.

Strong Liquidity and Moderate Leverage

A substantial cash balance provides runway to fund R&D, platform enhancements, and discovery programs without immediate financing. Combined with a moderate debt/equity ratio (0.33), this liquidity supports strategic flexibility through revenue volatility and reduces short-term dilution or refinancing risk.

Negative Factors

Persistent Negative Profitability

Deep, sustained net losses and very negative margins indicate the business has not yet achieved scalable profitability. Extended unprofitability erodes equity, limits reinvestment capacity, and increases dependence on external funding or collaboration milestones to sustain growth and cover fixed operating costs.

Weak Cash Generation

Inability to convert revenue into positive operating and free cash flow is a structural concern. Over the medium term this can force financing, constrain R&D or go-to-market investment, and heighten execution risk if partner payments or capital markets access tighten, undermining long-run sustainability.

Slower Software Growth & Pharma Scale-Up Delays

Revised lower software growth guidance and cited pharma scale-up delays signal structural go-to-market headwinds. If large pharmaceutical conversions and enterprise deployments lag, revenue cadence and margin expansion slow, reducing visibility into durable recurring revenue and delaying platform economies of scale.

Schrodinger Business Overview & Revenue Model

Company Description

Schrödinger, Inc., together with its subsidiaries, provides physics-based software platform that enables discovery of novel molecules for drug development and materials applications. The company operates in two segments, Software and Drug Discovery. The Software segment is focused on selling its software for drug discovery in the life sciences industry, as well as to customers in materials science industries. The Drug Discovery segment focuses on building a portfolio of preclinical and clinical programs, internally and through collaborations. The company serves biopharmaceutical and industrial companies, academic institutions, and government laboratories worldwide. Schrödinger, Inc. was incorporated in 1990 and is based in New York, New York.

How the Company Makes Money

Schrodinger generates revenue through a combination of software licensing, subscription fees for its computational platform, and collaborations with pharmaceutical and biotechnology companies. Key revenue streams include the sale of licenses to its software products, which provide users access to its advanced predictive modeling tools, as well as consulting services that help clients optimize their research workflows. Additionally, Schrodinger has established significant partnerships with major pharmaceutical companies, contributing to its earnings through collaborative research agreements and milestone payments tied to the development of drug candidates. These partnerships often lead to shared outcomes, allowing Schrodinger to benefit from the success of its clients' products in the market.

Schrodinger Financial Statement Overview

Summary

Schrodinger is experiencing revenue growth but faces significant challenges in achieving profitability and maintaining healthy cash flows. The balance sheet is relatively stable, but the negative return on equity and cash flow issues highlight the need for strategic improvements to enhance financial performance.

Income Statement

Schrodinger's revenue has shown a positive growth trend with an 8% increase in the TTM period. However, the company is struggling with profitability, as indicated by negative net profit and EBIT margins. The gross profit margin remains relatively strong at 58.5%, but the persistent negative net profit margin of -76.2% highlights ongoing challenges in managing costs and achieving profitability.

Balance Sheet

The company's debt-to-equity ratio is moderate at 0.33, indicating a balanced approach to leveraging. However, the return on equity is negative, reflecting the company's inability to generate profits from shareholders' equity. The equity ratio is not provided, but the overall balance sheet suggests a need for improved profitability to enhance financial stability.

Cash Flow

Schrodinger's cash flow situation is concerning, with negative operating and free cash flows. The free cash flow growth rate is significantly negative, indicating deteriorating cash generation capabilities. The operating cash flow to net income ratio is low, suggesting inefficiencies in converting income into cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	256.95M	207.54M	216.67M	180.96M	137.93M	108.09M
Gross Profit	149.45M	132.08M	140.69M	101.02M	65.62M	63.47M
EBITDA	-140.77M	-203.14M	-171.90M	-142.47M	-108.60M	-57.26M
Net Income	-175.99M	-187.12M	40.72M	-149.19M	-100.39M	-24.46M
Balance Sheet
Total Assets	653.66M	823.23M	802.96M	688.59M	756.49M	746.26M
Cash, Cash Equivalents and Short-Term Investments	400.99M	352.12M	463.00M	451.09M	576.48M	642.69M
Total Debt	111.43M	117.83M	127.88M	116.49M	79.87M	11.76M
Total Liabilities	332.31M	401.78M	254.40M	240.68M	199.40M	122.24M
Stockholders Equity	321.35M	421.44M	548.56M	447.89M	557.07M	624.01M
Cash Flow
Free Cash Flow	-3.40M	-164.68M	-150.14M	-127.70M	-77.84M	14.22M
Operating Cash Flow	-1.12M	-157.37M	-136.73M	-119.68M	-70.67M	16.76M
Investing Cash Flow	9.96M	148.84M	193.03M	90.02M	-16.81M	-381.72M
Financing Cash Flow	2.85M	10.12M	9.05M	2.11M	7.95M	541.27M

Schrodinger Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 16.79
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SDGR, the sentiment is Negative. The current price of 16.79 is below the 20-day moving average (MA) of 18.19, below the 50-day MA of 17.88, and below the 200-day MA of 20.48, indicating a bearish trend. The MACD of -0.09 indicates Positive momentum. The RSI at 35.94 is Neutral, neither overbought nor oversold. The STOCH value of 19.71 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SDGR.

Schrodinger Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OMCL	71 Outperform	$2.27B	118.48	1.62%	―	10.67%	―
CERT	62 Neutral	$1.51B	141.10	1.03%	―	11.47%	―
TXG	60 Neutral	$2.60B	-32.84	-10.12%	―	1.92%	59.18%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
SOPH	51 Neutral	$369.77M	-4.88	-86.09%	―	13.66%	-2.65%
DH	49 Neutral	$338.55M	-1.42	-47.69%	―	-5.30%	46.01%
SDGR	44 Neutral	$1.24B	-6.98	-45.67%	―	32.90%	1.85%