SDGR Stock Risk & Deep Value Analysis
Schrodinger Inc
Healthcare • Health Information Services
DVR Score
out of 10
What You Need to Know About SDGR Stock
We analyzed Schrodinger Inc using our deep value framework. Sign in to see our full verdict and DVR Score.
We ran SDGR through our deep value framework — analyzing financial health, distress signals, competitive moat, and risk factors. Our risk assessment: Aggressive. Here's what we found.
SDGR Risk Analysis & Red Flags
Risk Matrix
Overall
Aggressive
Financial
High
Market
Medium
Competitive
Medium
Execution
Medium
Regulatory
Medium
Upcoming Risk Events
- 📅
Q1 2026 earnings report showing worse-than-expected 2026 guidance or increased cash burn
- 📅
Failure or delays in key internal drug discovery programs
- 📅
Continued negative analyst sentiment and price target downgrades
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What Does Schrodinger Inc (SDGR) Do?
Market Cap
$895.09M
Sector
Healthcare
Industry
Health Information Services
Employees
891
Schrödinger, Inc., together with its subsidiaries, develops physics-based computational 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 sells its software to transform molecular discovery for life sciences and materials science industries. The Drug Discovery segment focuses on building a portfolio of preclinical and clinical programs, internally and through collaborations. It has a research collaboration and license agreement with Novartis Pharma AG to advance multiple development candidates. Schrödinger, Inc. was incorporated in 1990 and is based in New York, New York.
Visit Schrodinger Inc WebsiteInvestment Thesis
Schrödinger is a high-risk, high-reward investment positioned for significant long-term growth by leveraging its differentiated AI/physics-based platform to accelerate drug discovery. While near-term challenges exist, including an expected 2026 revenue decline and delayed profitability, its strong balance sheet, deep scientific moat, and dual-pronged business model provide substantial optionality for 10x returns if pipeline milestones are met and software growth re-accelerates.
Is SDGR Stock Undervalued?
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SDGR Price Targets & Strategy
12-Month Target
$21.50
Bull Case
$30.00
Bear Case
$8.50
Valuation Basis
Based on median analyst price target and potential recovery to 5.5x FY2027E Revenue, implying ~$1.5B market cap.
Entry Strategy
Dollar-cost average between $10-$12, capitalizing on current weakness and institutional support zones.
Exit Strategy
Take 50% profit at $20, reassess at $25-$30; Stop loss at $9.00 (below recent support).
Portfolio Allocation
5-7% for aggressive risk tolerance (moderate-high conviction, high volatility).
Price Targets & Strategy
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Is SDGR Financially Healthy?
Valuation
P/E Ratio
-8.56
Forward P/E
-10.50
Profitability
Gross Margin
74.00%
Operating Margin
-66.34%
Net Margin
-68.49%
Return on Equity
-48.24%
Revenue Growth
23.00%
Balance Sheet
Current Ratio
3.25
Debt/Equity
0.35
Cash & Equivalents
$402.00M
Other
Beta (Volatility)
1.57
Does SDGR Have a Competitive Moat?
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🛡️ Narrow
Moat Trend
Expanding
Moat Sources
2 Identified
The proprietary physics-based AI platform is highly specialized and difficult to replicate, requiring deep scientific expertise, significant R&D, and substantial computational resources, giving Schrödinger a defensible early-mover advantage in this niche.
Moat Erosion Risks
- •Emergence of superior or equally effective competing AI/computational drug discovery platforms
- •Failure to achieve clinical validation of its internal or partnered drug pipeline
- •Changes in regulatory landscape for AI-driven drug development
SDGR Competitive Moat Analysis
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SDGR Market Intelligence
Sentiment & Insider Activity
Social Sentiment
Neutral to Bearish given recent price action and negative news.
Institutional Sentiment
Neutral. High institutional ownership (79.05%-95.46%) but recent UBS downgrade (Neutral, $13 PT) reflects caution.
Insider Activity (Form 4)
CEO Ramy Farid sold 3,661 shares on March 5, 2026. Four insider sales, no buys in the past 3 months. Inducement grants (minor dilution) on March 14, 2026.
Options Flow
Normal options activity; no unusual spikes reported.
Earnings Intelligence
Next Earnings
Estimated early May 2026 (for Q1 2026)
Surprise Probability
Medium
Historical Earnings Pattern
Beat Q4 2025 EPS/revenue estimates. Stock reaction is typically volatile, heavily influenced by forward guidance and pipeline updates, especially given the current growth outlook.
Key Metrics to Watch
Competitive Position
Top Competitor
Recursion Pharmaceuticals (RXRX)
Market Share Trend
Stable - focused on platform development and internal pipeline, with strong growth potential within its niche.
Valuation vs Peers
Difficult to compare directly due to unique physics-based platform and TTM losses. SDGR is trading at approximately 3.4x TTM P/S based on $0.88B MC and $255.87M TTM revenue, which may be low for a high-growth biotech, but uncertainty around 2026 revenue decline complicates direct comparison.
Competitive Advantages
- •Proprietary physics-based computational platform for drug discovery
- •Dual software and internal drug pipeline business model
- •Validated by significant industry collaborations ($650M cash from collaborations past 5 years)
Market Intelligence
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What Could Drive SDGR Stock Higher?
Near-Term (0-6 months)
- •Q1 2026 Earnings (Estimated early May 2026)
- •Progress updates on internal drug pipeline (pre-clinical/IND filings)
Medium-Term (6-18 months)
- •Successful transition to ACV software metric, leading to re-acceleration of software revenue post-2026
- •New or expanded strategic drug discovery collaborations
- •Advancement of partnered drug candidates into clinical trials
Long-Term (18+ months)
- •First internal drug candidate entering clinical trials
- •Commercialization of a drug discovered using Schrödinger's platform
- •Significant market penetration into materials science sector
Catalysts & Growth Drivers
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What's the Bull Case for SDGR?
- ✓
Acceleration in software ACV growth (post-2026)
- ✓
Positive clinical data readouts or IND filings from internal pipeline assets
- ✓
Sustained reduction in cash burn towards profitability targets
- ✓
New significant collaboration agreements
Bull Case Analysis
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Competing with SDGR
See how Schrodinger Inc compares to related companies
| Company | Market Cap | DVR Score | P/E | Revenue | Profit Margin | Rev Growth | |
|---|---|---|---|---|---|---|---|
Schrodinger Inc SDGR | $895.1M | 7.9 | -8.6 | $256.0M | -68.5% | 23.0% | |
AbbVie Inc ABBV | $403.8B | 0.1 | 171.8 | — | — | — | Compare → |
Johnson & Johnson JNJ | — | 1.0 | — | — | — | — | Compare → |
Eli Lilly and Co LLY | $965.0B | 0.5 | 52.6 | — | — | — | Compare → |
Pfizer Inc PFE | $150.6B | 0.2 | 19.4 | $62.6B | 12.4% | -1.6% | Compare → |
UnitedHealth Group Inc UNH | $276.2B | 0.3 | 22.9 | $113.7B | 2.7% | 1181.0% | Compare → |
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FAQ
What is the DVR Score for Schrodinger Inc (SDGR)?
As of March 24, 2026, Schrodinger Inc has a DVR Score of 7.9 out of 10, placing it in the "Solid Pick" category. This score is generated by our AI-powered deep value analysis framework that evaluates growth potential, financial health, competitive moat, and risk factors.
What is the market capitalization of Schrodinger Inc?
Schrodinger Inc's market capitalization is approximately $895.1M. The company operates in the Healthcare sector within the Health Information Services industry.
What ticker symbol does Schrodinger Inc use?
SDGR is the ticker symbol for Schrodinger Inc. The company trades on the NMS.
What is the risk level for SDGR stock?
Our analysis rates Schrodinger Inc's overall risk as Aggressive. This assessment considers execution risk, market risk, financial risk, competitive risk, and regulatory risk. For a full breakdown, see the risk analysis section above.
What is the P/E ratio of SDGR?
Schrodinger Inc currently has a price-to-earnings (P/E) ratio of -8.6. This is below the market average, which could indicate the stock is undervalued or facing headwinds.
Is Schrodinger Inc's revenue growing?
Schrodinger Inc has reported revenue growth of 23.0%. The company is showing strong top-line momentum.
Is SDGR stock profitable?
Schrodinger Inc has a profit margin of -68.5%. The company is currently unprofitable.
How often is the SDGR DVR analysis updated?
Our AI-powered analysis of Schrodinger Inc is refreshed regularly to incorporate the latest financial data, market conditions, and news. The most recent update was on March 24, 2026.
Important Disclaimer – Not Financial Advice
Deep Value Reports is an independent research platform for educational and informational purposes only. We are not financial advisors, investment advisors, or licensed professionals. The analysis, scores, and information provided on this page for SDGR (Schrodinger Inc) should not be construed as personalized investment advice, a recommendation to buy or sell any security, or an offer to provide investment advisory services.
All investments involve risk, including the potential loss of principal. Past performance does not guarantee future results. Always conduct your own research, consider your financial situation, and consult with a qualified financial advisor before making any investment decisions.