If You Had Bought Schrödinger (NASDAQ:SDGR) Stock A Year Ago, You Could Pocket A 261% Gain Today

Unless you borrow money to invest, the potential losses are limited. But if you pick the right business to buy shares in, you can make more than you can lose. For example, the Schrödinger, Inc. (NASDAQ:SDGR) share price had more than doubled in just one year - up 261%. Also pleasing for shareholders was the 107% gain in the last three months. We'll need to follow Schrödinger for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.

View our latest analysis for Schrödinger

Schrödinger wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last year Schrödinger saw its revenue grow by 31%. We respect that sort of growth, no doubt. The revenue growth is decent but the share price had an even better year, gaining 261%. If the profitability is on the horizon then now could be a very exciting time to be a shareholder. Of course, we are always cautious about succumbing to 'fear of missing out' when a stock has shot up strongly.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

It's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. You can see what analysts are predicting for Schrödinger in this interactive graph of future profit estimates.

A Different Perspective

It's nice to see that Schrödinger shareholders have gained 261% over the last year. A substantial portion of that gain has come in the last three months, with the stock up 107% in that time. Demand for the stock from multiple parties is pushing the price higher; it could be that word is getting out about its virtues as a business. It's always interesting to track share price performance over the longer term. But to understand Schrödinger better, we need to consider many other factors. For example, we've discovered 2 warning signs for Schrödinger that you should be aware of before investing here.

Of course Schrödinger may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

When trading Schrödinger or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.