Article published Sep 23, 2026. Prices below use latest available snapshots.
SDGR Price Structure
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Verdict: doing well for a year, and extended after a vertical September — wait for the flag, don't chase. The stock is in a real one-year uptrend and made a new 52-week high this month, but nothing on the record explains the September leg: no 8-K since the August 5 results, no collaboration or milestone announcement, and an insider sale into the rally. The software business underneath is steady rather than accelerating. Medium conviction.
Quick Snapshot (as of 2026-09-23)
| Question | Answer |
|---|---|
| The call | 🟡 Wait for the flag; do not chase the September leg. Entry $23–$26 · stop $20.50 · first target $31.59 · medium conviction. |
| What it is | A physics-based molecular-simulation software company. It licenses its platform to drug and materials researchers (78% of fiscal 2025 revenue) and runs a drug-discovery arm that earns collaboration fees and milestones and owns two Phase 1 cancer programs. |
| Why now | The stock rose about 56% in a month to a new 52-week high on 1.55 times normal volume. No filing, press release or news article on the record explains it. |
| Proof | Fiscal 2025 software revenue grew 11% to $199.5 million, gross dollar retention held at 96% and all top-20 pharma companies license the platform (10-K). Q2 2026 revenue grew 7.5% year over year and the operating loss narrowed. |
| Objection | Net dollar retention fell to 100% from 113%, annual contract value grew only 4%, $1 million-plus customers slipped to 27 from 29, and the company still burns cash: operating cash flow was negative $34.1 million in Q2. |
| Stock setup | Momentum Board parabolic tier: 88% above the 200-day, RSI 72. This is the pop, not the flag. Buy a pullback that holds $23–$26 and cools; the breakout is a close back above the $31.59 September high. |
Action Matrix (as of 2026-09-23)
| Signal | If | Then |
|---|---|---|
| 🟢 Buy | A pullback holds $23–$26 (where the 10- and 20-day averages sit tonight) for two weeks or more on falling volume, with RSI back toward 50 | Start a trend-hold position; that is the flag after the pop. |
| 🟡 Wait | Price stays above $26 with RSI near 70, or keeps running without a base | Wait. Buying here pays for an unexplained leg at its most extended point. |
| 🔴 Out | A close below $20.50 | The pullback has given back most of the September leg and is heading for the 50-day average; no flag. Stand aside. |
| 🟠 Target | A close back above $31.59, the September high | First target reached, and the breakout from the flag; trail the stop rather than sell. |
| 🔴 Thesis breaks | The November 4 Q3 print (scheduled) shows software revenue down year over year, or management cuts its software outlook | The software floor that justifies holding through lumpy quarters is gone. |
The Story Right Now (as of 2026-09-23)
Schrödinger is doing well: the one-year trend is up, and September turned a steady climb into a vertical run to a new 52-week high that nothing on the record explains.
Data as of 2026-09-23 close: SDGR $29.23, RSI 72.1, +28.2% vs SMA20, +88.1% vs SMA200, 1D -4.79%, 7D +22.15%, 30D +55.73%, 3M +90.67%, 1Y +53.36%, 2Y +54.17%, -7.47% from the 52-week high.
The long trend is intact. The desk's summaries show the stock up 53.4% over one year with 37.6 points of alpha over the S&P 500, a golden cross in place, and a strong uptrend. It sits 88% above its 200-day average, which puts it in the Momentum Board's parabolic tier. Over longer windows it is a recovery rather than a new high: flat over three years and down 51.7% over five. Over the past month (August 24 to September 23) the daily range ran from an $18.63 low to a $31.59 high.
The September leg has no cause on the record. The last 8-K was the August 5 second-quarter release. The only September filings are a Form 144 on September 17 and a Form 4, filed September 21, for an insider's option exercise and sale on September 17: 31,599 shares for about $0.93 million. The news pull on September 23 returned no September article: its two newest items are stock-quote pages, not reporting. An Endpoints News roundup on September 9 lists Schrödinger among its items, but the capture holds only the headline. Company events for the ticker show only the August 5 print and the scheduled November 4 print. Cause unknown, with those checks named.
It is company-specific, not the cohort. The other AI-drug-discovery platforms moved far less over the same 30 days: Recursion, Tempus, Ginkgo, Absci and AbCellera (table below). The biotech index fund XBI is down over the month. Volume confirms real participation: tonight's volume ran 1.55 times the average, and September 17 was the heaviest of the five sessions in the short-volume record.
Which business is the market pricing? It is not pricing a disclosed pipeline event, because none exists: no milestone, readout or new collaboration has been filed or reported since August. The 10-K also shrinks the pipeline story. The company says it will not start new clinical trials on its own and will look for partners for its two Phase 1 programs, SGR-1505 and SGR-3515, after stopping a third (SGR-2921) in August 2025 because of patient deaths. The only September narrative on file is about software. A September 18 X post says management calls a new product, "Bunsen," the category with the strongest customer interest among its new products in nearly 20 years. That is attributed to management by the poster, not checked against a filing, and the 10-K does not name the product. A widely viewed YouTube video claims a large Gates-linked stake; the 10-K confirms only $19.5 million of Gates Foundation grants for the predictive-toxicology product. Our inference is that the move prices the software and AI-platform story, not clinical outcomes, but the tape has run ahead of any evidence for it.
The software business is steady, not accelerating. In fiscal 2025 software revenue grew 11%, to $199.5 million. Annual contract value grew 4%, to $198.5 million. Gross dollar retention held at 96%, but net dollar retention fell from 113% to 100%, so existing customers stopped expanding on net. Customers paying $1 million or more a year fell from 29 to 27, though their average contract rose from $3.3 million to $3.9 million. Q2 2026 revenue was $58.9 million, up 7.5% year over year. The GAAP operating loss narrowed to $41.5 million, and gross margin reached 55.1%. The quarter ended June 30, 2026 also showed positive GAAP net income ($6.0 million, a quarterly figure, not the trailing year), but that came from non-operating items the filed statements on hand do not break out; the operating line is still a loss.
Positioning matters. Short interest was 11.1 million shares on August 31, 11.8 days of average volume to cover (Massive). The insider feed shows 25 sales and no purchases. Short covering could add to a run, but no data on file ties this move to it.
The call: wait, medium conviction. For a trend-hold buyer the shape reads bottom, pop, second pop: a flag has not formed yet. Buying at RSI 72 and 88% over the 200-day, on a leg with no known cause and an insider selling, is a chase. The setup worth buying is a pullback that holds $23–$26 for a couple of weeks and cools, then a close back above $31.59. What would change the view: a filed cause (a collaboration, milestone or product launch in an 8-K) would make this a pop worth buying on a shallower flag. A close below $20.50 means no flag. A Q3 print on November 4 with software revenue down year over year would break the case.
Extended analysis
Why This Moment Is Different
Two things are new since the June dive. The tape set a new 52-week high: the June 4 dive, written at $15.80, called $22–$28 the base target, and the stock has run through it. And the pipeline is smaller. The 10-K (filed February 25, 2026) says the company will finish its two Phase 1 dose-escalation trials, will not start new clinical trials on its own, and will seek partners for SGR-1505 (MALT1) and SGR-3515 (Wee1/Myt1). It stopped SGR-2921 in August 2025. More of the value now rests on software and partner-funded discovery than a year ago.
What has not changed is the absence of a dated catalyst for September. The filing record and the news pull both come up empty for the month (checks named above), so the "why now" is a price event, not a business event.
How the Business Makes Money
Schrödinger reports two segments, Software and Drug Discovery. The 10-K splits fiscal 2025 revenue of $255.9 million into $199.5 million of software and $56.4 million of drug discovery (78% and 22%). The quarterly segment split for 2026 is in the 10-Q but not on hand, so the quarterly table below shows the total only.
Software: licenses, customers, retention
- What it sells. Physics-based simulation (its FEP+ free-energy calculation, which the company says approaches lab-experiment accuracy in predicting binding affinity), the Maestro modeling environment, the LiveDesign collaboration platform, and a predictive-toxicology product funded by $19.5 million of Gates Foundation grants. The 10-K says the toxicology product was in beta and was expected to launch commercially in 2026. Materials science (batteries, semiconductors, displays, chemicals) uses the same engine.
- Who pays. All top-20 pharma companies licensed the software in 2025, and their licenses accounted for 37% of the software segment and 41% of annual contract value. In dollars that is $73.7 million and $80.8 million respectively, per the 10-K's customer disclosure. Commercial-customer contract value was $177.4 million, up from $165.8 million. More than 1,750 academic institutions used it.
- Stickiness. Gross dollar retention for commercial customers was 96% in both 2025 and 2024; net dollar retention was 100% in 2025, down from 113%. Customers above $1 million fell to 27 from 29, while their average contract grew to $3.9 million from $3.3 million: fewer but larger enterprise deals.
- Seasonality. Q4 is the heavy quarter: $87.2 million in Q4 2025 against $54–$60 million in the other quarters (Massive financials). That makes quarterly year-over-year growth noisy.
Drug discovery: collaborations, milestones, proprietary programs
- Collaborations. Upfront fees, research funding and discovery, development, regulatory and commercial milestones, plus royalties. The largest is the November 2024 Novartis agreement: a $150.0 million upfront payment received in January 2025, and up to $2.272 billion in milestones ($892.0 million discovery and development, $1.38 billion commercial). None of those milestones had been recognized as revenue at December 31, 2025.
- Equity stakes. The company takes stakes in co-founded collaborators. The 10-K's example: $47.6 million received in 2024 for its Morphic stake when Lilly bought Morphic.
- Proprietary programs. Two Phase 1 oncology assets, now marked for partnering, and no new independent clinical starts.
The split matters for the call. The biotech-funding thesis the desk tracks names tools and CRO orders, not AI-platform valuations or drug outcomes. Schrödinger's investable part under that lens is the software line. The drug-discovery line is optionality: milestones and royalties that are lumpy, partner-controlled and, by the 10-K's own account, not visible to the company in advance.
Top filed risks (10-K)
History of operating losses expected to continue; volatile quarterly results; customers not renewing or renewing lower; long, unpredictable sales cycles; competition; no guaranteed return on collaborations or equity stakes; a volatile share price.
What the Street and the Public Conversation Say
The conversation on file is thin and low quality. Tonight's combined social capture for this and two other biotech names returned nothing about Schrödinger. Its three results were about Viking and Natera. The September 16 and 18 captures carry YouTube explainer videos. The most viewed is a Gates-portfolio video whose stake claim the desk has not verified. There are two X posts. One is the "Bunsen" claim above, which attributes the product enthusiasm to management and does not check it against a filing. The other is a newsletter plug arguing that "the molecule is not the bottleneck." One September 18 video transcript describes a single-day jump of about 17%; the desk's tape, not a video, is the price record. No analyst note, rating change or press interview is on file for September.
The older news record is generic: market-sizing press releases on biosimulation and AI drug discovery, and Motley Fool comparisons with Recursion (June 2). None of it is dated to the move.
The Conviction Chain
| Claim | Evidence | Confirms | Breaks |
|---|---|---|---|
| The one-year uptrend is real | 1Y +53.4%, alpha +37.6, golden cross, 88% over the 200-day (desk summaries, September 23) | A shallow flag that holds above the 50-day | A close under the 50-day average, then the 200-day, which sits far below tonight |
| Software is a durable floor | 11% fiscal 2025 software growth, 96% gross retention, all top-20 pharma (10-K) | Q3 software revenue up year over year; ACV growth back above 4% in the fiscal 2026 10-K | Software revenue down year over year; gross retention below 90% |
| Software is accelerating (the implied September narrative) | Weakest link. None filed. One X post on "Bunsen"; net dollar retention fell to 100% | A disclosed product launch or contract-value acceleration in the Q3 release | Q3 software growth at or below the 2025 pace with no new-product revenue |
| The pipeline adds value | Novartis milestones up to $2.272 billion, none recognized; two Phase 1 assets | A partnering deal for SGR-1505 or SGR-3515, or a recognized Novartis milestone | Phase 1 safety stops like SGR-2921, or no partner by fiscal 2026 year-end |
| Cash is not a near-term constraint | Cash $287.9 million plus short-term investments $125.9 million at June 30 (EDGAR); TTM operating cash flow negative $126.9 million (Massive) | Operating loss keeps narrowing | A raise at these prices; an S-3 or ATM filing would be the tell |
Conviction is medium because the trend and the software floor are both on the record. The weakest link is the cause of the September leg. If the market is paying for software acceleration, the filed retention numbers point the other way.
Financial Proof
Quarterly series from Massive financials, reconciled against SEC EDGAR XBRL; ratios script-computed. All figures are GAAP. Q4 rows are derived by the provider from the annual filing (no separate Q4 filing), and Q4 per-share figures carry a provider share-count flag, so read them as approximate.
| Quarter | Revenue ($M) | YoY | Gross margin | R&D ($M) | Operating income ($M) | Operating margin | Net income ($M) | Diluted EPS (GAAP) | Operating cash flow ($M) | Source |
|---|---|---|---|---|---|---|---|---|---|---|
| Q3 2024 | 35.3 | n/a | 50.2% | 51.0 | -68.4 | -193.9% | -38.1 | -0.52 | -33.3 | Massive financials |
| Q4 2024 | 88.3 | n/a | 72.6% | 49.4 | -20.7 | -23.5% | -40.2 | -0.55 | -31.1 | Massive financials |
| Q1 2025 | 59.6 | n/a | 52.3% | 45.8 | -50.9 | -85.5% | -59.8 | -0.82 | 144.1 | Massive financials |
| Q2 2025 | 54.8 | n/a | 47.8% | 43.1 | -52.9 | -96.6% | -43.2 | -0.59 | -52.2 | Massive financials |
| Q3 2025 | 54.3 | +53.9% | 51.6% | 42.8 | -45.9 | -84.6% | -32.8 | -0.45 | -61.9 | Massive financials |
| Q4 2025 | 87.2 | -1.2% | 65.7% | 41.4 | -17.2 | -19.7% | 32.5 | 0.44 | -16.1 | Massive financials |
| Q1 2026 | 58.6 | -1.6% | 50.4% | 43.8 | -48.8 | -83.3% | -60.0 | -0.81 | -14.8 | Massive financials |
| Q2 2026 | 58.9 | +7.5% | 55.1% | 41.0 | -41.5 | -70.6% | 6.0 | 0.08 | -34.1 | Massive financials |
How to read it:
- Revenue is flat, not growing. Trailing-twelve-month revenue through Q2 2026 is $259.0 million, against $255.9 million for fiscal 2025. The Q3 2025 year-over-year jump reflects a weak Q3 2024, not acceleration.
- Cost discipline is the real improvement. R&D fell from $51.0 million in Q3 2024 to $41.0 million in Q2 2026, and the operating loss narrowed with it. The trailing-twelve-month operating loss is $153.4 million.
- The positive quarters are below the operating line. Q4 2025 and Q2 2026 net income were positive while operating income was negative. The non-operating items behind them are not broken out in the statements on hand.
- Cash flow. The Q1 2025 inflow of $144.1 million reflects the $150.0 million Novartis upfront payment received in January 2025 (10-K). Excluding it, operating cash flow has been negative every quarter. Fiscal 2025 operating cash flow was $13.9 million (EDGAR), positive largely because of that upfront. First-half 2026 operating cash flow was negative $48.9 million.
- Balance sheet. Cash and short-term investments were $413.8 million at June 30, 2026 (EDGAR), with no debt line in the filed balance-sheet data. Total liabilities were $311.4 million.
| Fiscal 2025 segment | Revenue ($M) | Share | Source |
|---|---|---|---|
| Software | 199.5 | 78.0% | SEC 10-K |
| Drug discovery | 56.4 | 22.0% | SEC 10-K |
| Total | 255.9 | 100% | SEC 10-K / EDGAR XBRL |
Short interest (Massive): 11.1 million shares at the August 31 settlement, 11.8 days to cover. A fresh short-float percentage is not available.
Price Data
| Field | SDGR |
|---|---|
| As of | 2026-09-23 |
| Price ($) | 29.23 |
| RSI (14) | 72.1 |
| 1D (%) | -4.79 |
| 7D (%) | 22.15 |
| 30D (%) | 55.73 |
| 3M (%) | 90.67 |
| 1Y (%) | 53.36 |
| 2Y (%) | 54.17 |
| Alpha 1Y (pts) | 37.59 |
| vs SMA20 (%) | 28.2 |
| vs SMA50 (%) | 51.8 |
| vs SMA200 (%) | 88.1 |
| SMA20 ($) | 22.8 |
| SMA50 ($) | 19.26 |
| SMA200 ($) | 15.54 |
| From 52-week high (%) | -7.47 |
| Relative volume (x) | 1.55 |
AI drug-discovery cohort (as of 2026-09-23)
| Symbol | 7D (%) | 30D (%) | 1Y (%) | vs SMA200 (%) | RSI |
|---|---|---|---|---|---|
| SDGR | 22.15 | 55.73 | 53.36 | 88.1 | 72.1 |
| RXRX | 15.99 | 13.85 | -23.08 | 2.9 | 55.6 |
| TEM | 9.46 | 15.75 | -8.96 | 36.3 | 65.3 |
| DNA | 21.53 | 26.55 | -30.53 | 4 | 61.3 |
| ABSI | 21.14 | 10.18 | 274.62 | 73.1 | 56.7 |
| ABCL | 5.48 | 16.02 | 151.22 | 118.7 | 62 |
| XBI | 0.66 | -5.46 | 60.38 | 12.7 | 44.2 |
Setup
- Shape. A pop off a depressed base by early June (the June 4 dive saw $15.80, RSI 71, 43% below the prior high), a summer climb, then a steeper September leg to a new 52-week high. No flag since the September high.
- Entry zone: $23–$26. It is a condition, not a limit order. A pullback that holds this band for about two weeks on falling volume, with RSI back near 50, is the flag. The 10- and 20-day averages occupy the band tonight; they move, so judge the hold by the band.
- Stop: $20.50. Below it the pullback has erased most of the September leg; the next supports are the 50-day average and the $17.40 support shelf in the desk's volume profile.
- First target: $31.59. This is the September high; a close above it after a flag is the breakout, so trail the stop from there instead of selling.
Catalysts
- November 4, 2026 (scheduled): Q3 results. What to watch: software revenue growth against 2025's 11%, whether any "Bunsen" or predictive-toxicology revenue is named, and any Novartis milestone.
- Unscheduled: a partnering deal for SGR-1505 or SGR-3515; new top-20 pharma enterprise deals; a financing filing.
- Fiscal 2026 10-K (early 2027, expected): annual contract value, retention, and $1 million-plus customer counts, the real software scorecard.
Risks and Kill Tests
- Kill test 1: Q3 software revenue down year over year. The floor fails.
- Kill test 2: a close below $20.50 before any flag forms. The trend-hold setup fails; re-check against the 200-day.
- Kill test 3: an equity raise at these prices. It would signal management sees the run as financing currency, not a business re-rating.
- Risk: an unexplained leg can reverse just as fast. Insider sales (25 sells, no buys in the insider feed) and 11.8 days to cover make the stock two-way.
- Risk: Q4 seasonality makes Q1–Q3 growth look weak, so a flat Q3 is not by itself a kill test. Software revenue falling is.
Cross-references
- Prior dive (history): the June 4, 2026 Schrödinger deep dive, written at $15.80 with RSI 71: entry $13–$15, stop $11, base target $22–$28. The stock ran through that target band. That dive's sum-of-parts framing and its figures are dated June 4 and not current.
- Desk thesis (history): the desk's biotech-funding thesis (last reviewed September 6) scopes tools and CRO orders. Its current scope explicitly excludes AI-biology platform valuation and individual drug outcomes. Schrödinger stays on that watchlist but is not one of the thesis's instruments, so the June framing of it as that thesis's "quality app-layer" leg is history, not a live lens.
- Screens, September 23: the stretch screen classifies the name as stretched momentum (RSI 72, 1.55 times relative volume). The miss screen lists it as an unclustered miss on the biotech-funding and IBB lists. The Momentum Board lists it as newly parabolic alongside Moderna and Illumina. The September 23 biotech scan does not cover the name.
- Not held-position context: this read is market-only.
Refresh History
| Date | Price | RSI | vs SMA20 | 30D | What changed |
|---|---|---|---|---|---|
| 2026-06-04 | $15.80 | 71 | n/a | +22% | First dive: sum-of-parts, software floor plus pipeline and stake optionality; entry $13–$15 |
| 2026-09-23 | $29.23 | 72.1 | +28.2% | +55.73% | New 52-week high with no filed or reported cause; the 10-K scales back independent clinical work; wait for the flag |
Sources
- Tape: desk summaries, biotech-capital-cycle watchlist, 2026-09-23 close (biotech-capital-cycle); 30-day range from the desk's chart print (
show SDGR 30d, Schwab daily bars, 2026-08-24 to 2026-09-23); Momentum Board 2026-09-23-monster-scan; biotech scan 2026-09-23-biotech-scan; stretch and miss screens (2026-09-23 scratch prints). - Financials: Massive income, balance and cash-flow statements, 8 quarters (income-statements,
balance-sheets.json,cash-flow-statements.json); SEC EDGAR XBRL facts (key-financials); short interest and short volume (massive/short-interest.json,massive/short-volume.json). Series computed by script. - Filing narrative: 10-K business and risk-factor sections (
massive/10k-business.json,massive/10k-risk_factors.json). Primary: SEC 10-K, fiscal 2025 (filed 2026-02-25); SEC 10-Q, Q2 2026 (filed 2026-08-05); SEC 8-K, Q2 2026 results (2026-08-05); Schrödinger Q2 2026 results release. - Insiders: SEC Form 4 filed 2026-09-21 (transaction 2026-09-17) (capture 2026-09-21-sdgr-4-0001797672-26-000006); SEC Form 144 filed 2026-09-17; insider panel from the desk's leading-indicator print (US Form 4 feed).
- News: latest (fetched 2026-09-23T21:17Z, ok, not stale; newest article dated 2026-08-05; two index/quote pages); Massive news feed (
massive/news-latest.json); Endpoints News, September 9 roundup (capture 2026-09-09-endpointsnews-compass-posts-positive-psilocybin-data-solstice-makes-225m-d-ts-news-p-589779, headline only); Motley Fool, Recursion vs. Schrödinger (June 2). - Events: 2026-08-05-sdgr-earnings, 2026-11-04-sdgr-earnings.
- Social (attributed, unverified): X post on "Bunsen," 2026-09-18 capture; X newsletter post; YouTube, Gates-stake video; YouTube, September 18 rally video. Captures: 2026-09-18-social-search-sdgr, 2026-09-16-social-search-sdgr, 2026-09-23-social-search-ntra-vktx-sdgr (no Schrödinger results).
- History: 2026-06-04-sdgr-deep-dive; desk thesis via
research:campaign show biotech-capital-cycle(reviewed 2026-09-06).