Schrödinger, Inc. (SDGR)
NASDAQHealth CareSoftware - ApplicationSnapshot 2026-09-09
$19.20-4.14%
Close 2026-09-09 · 1-day change
NASDAQHealth CareSoftware - ApplicationSnapshot 2026-09-09
Intact: The reason to own it still holds.
Schrödinger is growing drug discovery revenue strongly, from $10.2M to $22.9M in Q1 2026. The company is shifting to hosted software licensing, a strategic move despite short-term revenue decline. It received a $57M cash payment from a recent acquisition, boosting cash. Revenue guidance for 2026 is steady near $223M. These show progress in its turnaround.
The company is still loss-making with negative EPS and missed Q1 2026 estimates by 42%. Software revenue dropped 21% due to the licensing shift. Management changes and litigation risks add uncertainty. Revenue growth is slow and below typical sector peers. The turnaround may stall or fail.
The price is about 53% below our fair value near $35, reflecting skepticism. Analysts expect only 2.5% revenue growth next year. Our view is more optimistic on drug discovery growth and strategic transition progress.
Breaks if: drug discovery revenue falls below $22.9 million in any quarter
Grow drug discovery revenue through collaborations and milestone achievements, including benefits from Ajax acquisition.
This is not a price target or investment advice.
A long-form read on the 1–3 year hold thesis. It updates when the weekly evidence changes.
This investment represents a speculative growth opportunity with a focus on innovation in drug discovery and software licensing. The current thesis state is weakened due to recent financial performance and management challenges.
The market currently prices in a durable premium compared to peers, indicating that investors expect SDGR to maintain a strong position despite recent challenges. However, there is an expectations gap, suggesting that the market may be overly optimistic about future performance.
Fundamentals may continue to show weakness in the near term, given the company's recent drop in quality and mixed results from management's priorities. However, there are signs of progress in drug discovery revenue and the transition to hosted software licensing.
The thesis hinges on management's ability to execute on key priorities, particularly the expansion of Bunsen AI and the transition to hosted software. Additionally, external factors such as sector performance and economic conditions will significantly influence the company's trajectory.
The most important moves since the prior daily snapshot.
Yes, our read has weakened. The reason to own SDGR has diminished due to recent financial performance. It fell from the robust 53rd to the 29th percentile of its sector. However, the latest earnings beat provided some support for the thesis.
as of 2026-09-09
Review the evidence to watch, what would become a concern, and what would make it less concerning.
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.
Stated as a priority in 3 of last 3 quarters. Drug discovery revenue increased from $13.9 million in 2025-Q2 to $23.0 million in 2026-Q2, aided by a $10 million milestone from Ajax acquisition. The revenue growth trajectory aligns with management’s stated focus and milestone achievements, indicating delivery.
“Drug discovery revenue was $23.0 million compared to $13.9 million, primarily due to the achievement of a $10 million collaboration milestone associated with the Ajax Therapeutics acquisition.”
“Drug discovery revenue was $22.9 million compared to $10.2 million, due to the accelerated recognition of deferred revenue associated with the continued progress of the company’s collaboration portfo…”
“Drug discovery revenue was $18.0 million compared to $8.7 million.”
Breaks if: software revenue declines more than 21% from 2025-Q1 levels persistently
Breaks if: EPS loss worsens beyond -$2.23 in FY 2026
Breaks if: annual revenue falls below $218 million in FY 2026
Grow drug discovery revenue through collaborations and milestone achievements, including benefits from Ajax acquisition.
Stated as a priority in 3 of last 3 quarters. Drug discovery revenue increased from $13.9 million in 2025-Q2 to $23.0 million in 2026-Q2, aided by a $10 million milestone from Ajax acquisition. The revenue growth trajectory aligns with management’s stated focus and milestone achievements, indicating delivery.
“Drug discovery revenue was $23.0 million compared to $13.9 million, primarily due to the achievement of a $10 million collaboration milestone associated with the Ajax Therapeutics acquisition.”
“Drug discovery revenue was $22.9 million compared to $10.2 million, due to the accelerated recognition of deferred revenue associated with the continued progress of the company’s collaboration portfo…”
“Drug discovery revenue was $18.0 million compared to $8.7 million.”
Over the next 1 to 3 years, SDGR's performance will depend on its management execution and external market conditions. Not investment advice.