Schrodinger (SDGR) AI Stock Analysis

• Market Cap: $937.58M
• Dividend Yield: N/A
• Average Volume (3M): 1.54M
• Price to Earnings (P/E): 10.1
• Beta (1Y): 1.67
• 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: 64,660,910
• 10 Day Avg. Volume: 1,201,160
• 30 Day Avg. Volume: 1,538,820
• PEG Ratio: 0.28
• Price to Book (P/B): 3.61
• Price to Sales (P/S): 5.13
• P/FCF Ratio: 105.42
• Enterprise Value/Market Cap: 0.84
• Enterprise Value/Revenue: 3.07
• Enterprise Value/Gross Profit: 5.51
• Enterprise Value/Ebitda: -9.17
• 1Y Price Target: $19.40
• Price Target Upside: 52.76% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): -1.98
• Revenue Forecast (FY): $266.18M

• Rating: 52 Neutral
• Price Target: $12.50 ▼(-1.57% Downside)
• Action: Reiterated Date: 03/13/26
• Date: Action: Reiterated 03/13/26

The score is held back primarily by uneven financial performance (losses, prior cash burn, and growth volatility) and a weak technical trend (below key moving averages with negative MACD). Offsetting these are constructive earnings-call signals (ACV growth outlook, cost discipline, strong cash position) and a relatively modest P/E, though near-term revenue/margin volatility from the hosted transition limits upside to the rating.

Positive Factors

Scale of software ACV

A near-$200M software ACV base indicates substantial recurring revenue and customer dependence on the platform. That scale supports predictable renewal cash flows, cross-sell opportunities and operating leverage over time, undergirding sustainable top-line stability and platform defensibility.

Strong cash position

A cash war chest of roughly $400M gives management flexibility to fund R&D, absorb hosted-transition timing effects, and execute on multi-year plans to reach positive adjusted EBITDA by 2028 without near-term financing. This materially reduces liquidity risk and supports strategic investments.

Drug-discovery momentum & portfolio

Growing drug-discovery revenue plus an expanding partner/program portfolio diversifies revenue beyond software and creates high-upside milestone and royalty streams. Successful collaborations and clinical progress materially enhance long-term optionality and potential recurring backend cashflows.

Negative Factors

Inconsistent revenue growth

Revenue trajectory has been choppy, reflecting variable licensing timing, partner payments and structural shifts. That inconsistency reduces near-term visibility, complicates resource planning and raises execution risk as management balances software growth, hosted migration and milestone-driven discovery revenues.

Persistent losses; shrinking equity

Cumulative losses have materially eroded equity and produced negative returns on equity, limiting balance-sheet flexibility. Even with manageable debt, a declining equity base heightens downside risk, constrains capital allocation choices and increases vulnerability to profit shortfalls or adverse financing conditions.

Hosted transition causes accounting headwinds

Accelerating the shift to hosted contracts is strategic long-term but creates predictable near-term revenue recognition losses and margin compression. This structural accounting dynamic will cause multi-year reported volatility and temporarily depress gross margins and adjusted EBITDA as the mix shifts toward hosted delivery.

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

Schrödinger primarily makes money through (1) software revenue and (2) drug discovery revenue. 1) Software revenue (core, recurring): The company sells access to its Schrödinger software platform mainly via licenses/subscriptions to pharmaceutical, biotechnology, academic, and industrial customers. This stream typically includes term-based software subscriptions/licenses, maintenance/support, and associated offerings such as training and professional services tied to deploying and using the platform in customers’ research workflows. 2) Drug discovery revenue (partnering and pipeline-related): Schrödinger also monetizes its internal drug discovery efforts through collaborations and licensing arrangements with biopharma partners. These deals can generate upfront payments, research funding/reimbursements, and potential downstream payments such as milestone payments and royalties if partnered programs progress and commercialize. In addition, the company may record revenue related to the sale or out-licensing of rights to drug candidates or other collaboration deliverables when applicable. Key factors that contribute to earnings include the breadth of the installed base of software users (driving renewals/expansions) and the timing and success of collaboration-driven payments in the drug discovery segment, which can be less predictable and more dependent on partner decisions and clinical/regulatory progress.

Schrodinger Financial Statement Overview

Summary

Gross margins are solid and leverage is manageable, with 2025 returning to positive operating and free cash flow. However, results remain dominated by inconsistent growth, persistent losses, and a shrinking equity base, keeping overall financial quality in the mid-to-lower range.

Income Statement

Revenue expanded from $108.1M (2020) to $255.9M (2025), but the trajectory has become choppy with two straight years of revenue decline (2024: -4.2%; 2025: -42.1%). Gross margins are solid for the business model (roughly mid-50s to mid-60s), indicating good underlying unit economics. However, profitability remains the key weakness: operating results are deeply negative and net margins have been consistently loss-making in most years (2025 net margin about -40%), with 2023 profitability not sustained. Overall, strong gross profit profile but insufficient scale/expense control to translate into consistent earnings.

Balance Sheet

Leverage appears manageable, with debt-to-equity staying relatively low-to-moderate (about 0.14–0.30) and total debt roughly stable around ~$109M–$128M in recent years. That said, the equity base has been trending down from $624.0M (2020) to $364.1M (2025), consistent with cumulative losses and reducing balance-sheet flexibility over time. Returns to shareholders are currently weak (2025 return on equity about -28%), reflecting ongoing profitability issues. Net: reasonable leverage, but declining equity and negative returns are notable risks.

Cash Flow

Cash generation has improved recently, with operating cash flow turning positive in 2025 ($13.9M) after sizable outflows in 2021–2024, and free cash flow also positive in 2025 ($12.5M). However, cash flow stability is a concern: free cash flow has been negative for several consecutive years before the 2025 rebound, and free cash flow growth is highly volatile. While 2025 free cash flow covered most of the net loss (free cash flow to net income ~0.90), the business has not yet demonstrated consistent, repeatable cash generation across the cycle.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	255.87M	207.54M	216.67M	180.96M	137.93M
Gross Profit	142.61M	132.08M	140.69M	101.02M	65.62M
EBITDA	-96.30M	-203.14M	-171.90M	-142.47M	-108.60M
Net Income	-103.27M	-187.12M	40.72M	-149.19M	-100.39M
Balance Sheet
Total Assets	726.16M	823.23M	802.96M	688.59M	756.49M
Cash, Cash Equivalents and Short-Term Investments	395.46M	352.12M	463.00M	451.09M	576.48M
Total Debt	109.23M	117.83M	127.88M	116.49M	79.87M
Total Liabilities	362.11M	401.78M	254.40M	240.68M	199.40M
Stockholders Equity	364.05M	421.44M	548.56M	447.89M	557.07M
Cash Flow
Free Cash Flow	12.46M	-164.68M	-150.14M	-127.70M	-77.84M
Operating Cash Flow	13.90M	-157.37M	-136.73M	-119.68M	-70.67M
Investing Cash Flow	57.90M	148.84M	193.03M	90.02M	-16.81M
Financing Cash Flow	2.93M	10.12M	9.05M	2.11M	7.95M

Schrodinger Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 12.70
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SDGR, the sentiment is Neutral. The current price of 12.7 is above the 20-day moving average (MA) of 12.26, below the 50-day MA of 14.29, and below the 200-day MA of 18.51, indicating a neutral trend. The MACD of -0.33 indicates Negative momentum. The RSI at 47.55 is Neutral, neither overbought nor oversold. The STOCH value of 52.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SDGR.

Schrodinger Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CERT	61 Neutral	$1.03B	-885.94	-0.15%	―	11.47%	―
TXG	55 Neutral	$2.13B	-46.73	-5.69%	―	1.92%	59.18%
OMCL	54 Neutral	$1.56B	1,014.72	0.17%	―	10.67%	―
SDGR	52 Neutral	$937.58M	10.10	-29.47%	―	32.90%	1.85%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
SOPH	48 Neutral	$351.89M	-3.99	-116.98%	―	13.66%	-2.65%
DH	47 Neutral	$157.09M	-2.20	-47.69%	―	-5.30%	46.01%

Schrodinger Corporate Events

Schrödinger Promotes Therese Abrams to Principal Accounting Officer

On March 8, 2026, Schrödinger, Inc. appointed Vice President and Corporate Controller Therese Abrams as its principal accounting officer, formalizing the role for a long-serving finance executive who has held a series of senior financial and revenue-focused positions at the company since 2013. Abrams, a certified public accountant with prior experience at Jive Software, EVRAZ North America and KPMG, entered into the company’s standard indemnification agreement, and her compensation arrangements were unchanged with this designation.

The leadership change follows the March 6, 2026 transition of Jenny Herman from her position as Chief Accounting Officer and principal accounting officer, with Herman remaining through April 10, 2026 to support an orderly handover. The move underscores continuity in Schrödinger’s finance function by elevating an internal candidate with deep institutional knowledge, which may help ensure stability in financial reporting and controls during the transition period.

The most recent analyst rating on (SDGR) stock is a Hold with a $12.00 price target. To see the full list of analyst forecasts on Schrodinger stock, see the SDGR Stock Forecast page.