SDGR - Schrodinger: A Long-Term Hold For Biotech Investors With Upside Potential Too

• With its software platform, Schrodinger is primarily a healthcare technology play but also performs drug discovery just like any other biotech.
• The stock has been on a downtrend since last year, partly explained by the lower growth forecast issued in November, but, subsequently, there has been better than expected FY-2021 sales.
• At current valuations, with positive gross margins and enough cash to cover operating losses, it makes for a better choice when compared to a competitor boasting better growth metrics.
• With its stable software revenues, Schrodinger also makes better sense than pure-play biotech.
• The stock makes for a long-term hold, with upside potential due to collaboration opportunities with pharma and also because of the possibility of being acquired.

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