Education
About Us
Working with TipRanks
Follow Us
Schrodinger (SDGR)
NASDAQ:SDGR
Top Page
Schrodinger
(NASDAQ:SDGR)
45Neutral
Positive Factors
Customer Retention
Customer retention rate among high-value customers was 100%, and the number of such customers increased from 54 to 61.
Growth Prospects
Optimism remains for further large collaboration announcements as more biopharma companies follow NVS's playbook.
Partnerships
An expanded research collaboration with LLY builds on a previous collaboration, indicating strengthened partnerships.
Revenue Growth
4Q24 software revenue increased 16.0% year-over-year due to increased hosted revenue from large customers.
Negative Factors
Cost Management
Software gross margin decreased to 83% due to higher cost of revenue associated with the predictive toxicology initiative.
Revenue Expectations
Q3 revenues were lower than consensus estimates primarily due to lower than anticipated software contribution.
Schrodinger (SDGR) vs. S&P 500 (SPY)
Market Cap
$1.46B
Dividend YieldN/A
Average Volume (3M)993.77K
Price to Earnings (P/E)―
Beta (1Y)2.37
Revenue Growth-4.21%
EPS Growth-544.81%
CountryUS
Employees891
SectorHealthcare
Sector Strength72
IndustryMedical - Healthcare Information Services
Share Statistics
EPS (TTM)-2.58
Shares Outstanding63,874,200
10 Day Avg. Volume836,591
30 Day Avg. Volume993,775
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)7.67
Price to Cash Flow (P/CF)-12.80
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$31.63Price Target Upside58.47% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
Schrodinger Business Overview & Revenue Model
Company DescriptionSchrödinger, Inc. is a leading provider of advanced molecular simulations and enterprise software solutions for the pharmaceutical, biotechnology, and materials science sectors. The company leverages its cutting-edge physics-based computational platform to accelerate drug discovery and materials design, offering a suite of software tools for molecular modeling, simulation, and data analysis. Schrödinger's core products include its flagship software platform for drug discovery and development, which is used by scientists and researchers worldwide to predict the properties and behavior of molecules with high accuracy.
How the Company Makes MoneySchrödinger generates revenue through multiple streams, primarily from software licensing, drug discovery collaborations, and materials science research partnerships. The company's software is licensed to pharmaceutical and biotechnology companies, academic institutions, and government laboratories, providing them with powerful tools for molecular modeling and simulations. Schrödinger also engages in strategic collaborations with pharmaceutical companies to co-develop novel therapeutics, sharing the potential commercial success of these projects. In addition, the company partners with materials science entities to apply its simulation technology to develop innovative materials, further diversifying its revenue streams. These collaborations often include milestone payments and royalties based on the success of the projects.
Schrodinger Financial Statement Overview
Summary
Schrodinger exhibits growth in revenue but struggles with profitability and cash flow generation. The company's increasing leverage and negative cash flows pose potential risks to its financial stability. Persistent losses and cash flow issues require strategic attention to improve financial health.Income Statement
Schrodinger's revenue has shown a positive trend with a consistent increase from 2019 to 2023. However, the company has faced continuous net losses, with significant negative EBIT and EBITDA margins, indicating challenges in achieving profitability. The gross profit margin improved slightly in recent years, but the negative net profit margin remains a concern for financial stability.35
Negative
Balance Sheet
The balance sheet shows a relatively stable equity position, although the debt-to-equity ratio has increased over time, reflecting higher leverage. The company has maintained a positive equity ratio, indicating a moderate level of financial health. However, the increasing liabilities and decreasing equity could pose long-term risks if not managed effectively.45
Neutral
Cash Flow
Cash flow analysis reveals a concerning trend with consistently negative operating and free cash flows, indicating that the company struggles to generate cash from its core operations. The negative free cash flow to net income ratio further highlights this issue. Positive financing cash flows indicate reliance on external financing, which might not be sustainable long-term.30
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 207.54M | 216.67M | 180.96M | 137.93M | 108.09M | Gross Profit |
| 132.08M | 140.69M | 101.02M | 65.62M | 63.47M | EBIT |
| -209.30M | -177.45M | -149.12M | -111.44M | -60.92M | EBITDA |
| -209.30M | -171.90M | -142.47M | -108.60M | -57.26M | Net Income Common Stockholders |
| -187.12M | 40.72M | -149.19M | -101.22M | -26.64M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 352.12M | 463.00M | 451.09M | 576.48M | 642.69M | Total Assets |
| 823.23M | 802.96M | 688.59M | 756.49M | 746.26M | Total Debt |
| 117.83M | 127.88M | 116.49M | 79.87M | 11.76M | Net Debt |
| -29.50M | -27.43M | 26.02M | -40.40M | -190.53M | Total Liabilities |
| 401.78M | 254.40M | 240.68M | 199.40M | 122.24M | Stockholders Equity |
| 421.44M | 548.56M | 447.89M | 557.07M | 624.01M |
| Cash Flow | Free Cash Flow | |||
| -164.68M | -150.14M | -127.70M | -77.84M | 14.22M | Operating Cash Flow |
| -157.37M | -136.73M | -119.68M | -70.67M | 16.76M | Investing Cash Flow |
| 148.84M | 193.03M | 90.02M | -16.81M | -381.72M | Financing Cash Flow |
| 10.12M | 9.05M | 2.11M | 7.95M | 541.27M |
Schrodinger Technical Analysis
Negative
19.96
Price Trends
22.98
Negative
21.65
Negative
20.72
Negative
Market Momentum
-0.52
Positive
39.05
Neutral
3.63
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 19.96 is below the 20-day moving average (MA) of 21.69, below the 50-day MA of 22.98, and below the 200-day MA of 20.72, indicating a bearish trend. The MACD of -0.52 indicates Positive momentum. The RSI at 39.05 is Neutral, neither overbought nor oversold. The STOCH value of 3.63 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SDGR.
Schrodinger Risk Analysis
Schrodinger disclosed 88 risk factors in its most recent earnings report. Schrodinger reported the most risks in the “Tech & Innovation” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Schrodinger Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | $8.67B | 107.27 | 2.27% | ― | 0.66% | ― | |
64 Neutral | $126.52B | ― | -3.15% | ― | 11.64% | -114.72% | |
52 Neutral | $5.67B | ― | -31.26% | ― | 104.04% | 87.80% | |
49 Neutral | $6.85B | 0.81 | -52.91% | 2.50% | 17.48% | 1.17% | |
48 Neutral | $2.34B | ― | -61.89% | ― | 32.00% | -6.86% | |
45 Neutral | $1.46B | ― | -38.58% | ― | -4.21% | -544.81% | |
41 Neutral | $2.15B | ― | -37.40% | ― | -100.00% | -144.79% |
* Healthcare Sector Average
Performance Comparison
SDGR
Schrodinger
19.96
-6.37
-24.19%
QGEN
Qiagen
39.85
-2.63
-6.19%
VRTX
Vertex Pharmaceuticals
492.69
72.21
17.17%
BPMC
Blueprint Medicines
88.72
-7.70
-7.99%
DNLI
Denali Therapeutics
14.78
-5.78
-28.11%
RXRX
Recursion Pharmaceuticals
5.81
-3.56
-37.99%
Schrodinger Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: -8.02% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant growth in software revenue and strategic collaborations, indicating positive operational momentum. However, the company faced challenges with increased operating losses and a decline in drug discovery revenue. While the progress in clinical programs and high customer retention are promising, financial strains and increased costs present challenges.Highlights
Record-Breaking Software Revenue Growth
Software revenue reached $180 million in 2024, representing a growth of over 13% year-over-year. Fourth quarter software revenue grew 16% to $80 million.
Successful Collaborations and Partnerships
Schrödinger established a new drug discovery collaboration and expanded a software agreement with Novartis. The company also expanded existing partnerships with Otsuka and Lilly.
Clinical Program Advancements
Progress in clinical programs, including the initiation of a Phase 1 study for SGR-3515 and anticipated clinical data releases for SGR-1505, SGR-2921, and SGR-3515 in 2025.
High Customer Retention
100% customer retention for those with annual contract value (ACV) of at least $500,000, and significant growth in customers with ACV over $5 million.
Lowlights
Increased Operating Loss
Operating loss for 2024 was $209 million, compared to $177 million in 2023, with a net loss of $187 million for the year.
Decline in Drug Discovery Revenue
Drug discovery revenue dropped from $58 million in 2023 to $27 million in 2024, attributed to the impact of non-recurring milestones.
Increased Cost of Revenue
Overall cost of revenue increased by 46% in Q4 2024 compared to Q4 2023, affecting gross margin, which declined from 77.6% to 72.6%.
Cash Position and Usage
Net cash used in operating activities was $157 million in 2024, an increase from $137 million in 2023, with a cash balance of $367 million at year-end.
Company Guidance
During the call, Schrödinger provided guidance for 2025, emphasizing plans to accelerate software business growth and advance drug discovery programs. The company anticipates software revenue growth between 10% and 15% and drug discovery revenue in the range of $45 million to $50 million. Hosted contracts are expected to account for a larger portion of the revenue, slightly reducing the fourth-quarter concentration. The software gross margin is projected to be 74% to 75%, down from 79.5% in 2024, due to the increased contribution from the predictive toxicology initiative. Operating expenses are anticipated to grow by less than 5% in 2025, with net cash used in operations expected to be lower than in 2024. Schrödinger's strong performance in key metrics, such as customer retention and annual contract values, underpins its optimistic outlook for the upcoming year.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.