Update shared on16 Aug 2025
Fair value Decreased 8.71%Schrödinger’s consensus price target has been revised downward to $28.20, reflecting analyst concerns over disappointing progress in its proprietary drug portfolio and broader sector headwinds, partially offset by steady performance in its software business.
Analyst Commentary
- Bearish analysts expressed concerns over disappointing updates from Schrodinger's proprietary drug portfolio, particularly lackluster progress in its early Phase 1 assets, which were previously anticipated to attract significant partner interest.
- Continued headwinds in the biotech and pharma sectors contributed to analyst caution and downward revisions in price targets.
- Bullish analysts identified upcoming Phase 1 data readouts for SGR-2921 and SGR-3515 in advanced solid tumors as potential catalysts that could meaningfully impact Schrodinger’s valuation.
- Volatility in Schrodinger’s stock performance was attributed to a mix of challenging macroeconomic conditions, weaker-than-hoped clinical trial results, and ongoing uncertainty around future revenue streams and valuation.
- The company's software business remains a consistent revenue generator and acts as a defensive component within the business model, offsetting some risk tied to drug development outcomes.
What's in the News
- Schrödinger discontinued clinical development of its CDC7 inhibitor SGR-2921 following safety concerns, including two patient deaths, despite evidence of monotherapy activity in early trials.
- The company reaffirmed full-year 2025 guidance, projecting 10–15% software revenue growth and $45–50 million in drug discovery revenue, with Q3 software revenue expected at $36–40 million.
- Schrödinger and Ajax Therapeutics expanded their research collaboration to include a new JAK target, making Schrödinger eligible for milestone payments and single-digit royalties on future products; Schrödinger also participated in Ajax's $95 million Series C round.
- SGR-1505, Schrödinger’s clinical stage MALT1 inhibitor, received Fast Track designation from the FDA for Waldenstrom macroglobulinemia after positive Phase 1 data indicated safety, tolerability, and preliminary efficacy across multiple B-cell malignancies.
- Schrödinger implemented a workforce reduction of about 60 employees (7% of staff) and other cost-saving measures, expected to lower annualized operating expenses by approximately $30 million.
Valuation Changes
Summary of Valuation Changes for Schrödinger
- The Consensus Analyst Price Target has fallen from $30.89 to $28.20.
- The Future P/E for Schrödinger has fallen from 83.18x to 77.78x.
- The Consensus Revenue Growth forecasts for Schrödinger has fallen slightly from 19.5% per annum to 18.5% per annum.
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