SDGR reports Q1 2026 results today with one of the more interesting short-side setups in health care technology — a heavily shorted name where the bears have quietly been retreating.
Short interest remains substantial at nearly 17% of the free float, making SDGR one of the more contested stocks in its peer group. Yet the trend has been moving against the shorts. Positions have fallen roughly 6% over the past month, from around 11.5 million shares in early April to 10.8 million as of May 4. Days to cover still run above 10 on the FINRA-reported figure, so unwinding isn't trivial. Borrow costs have actually eased — now at 0.48% APR, down about 14% on the week — and availability in the lending market is comfortable, sitting well above the 52-week tightest levels. The picture is one of a high short-interest stock where conviction among bears has been fading, not building.
Options tell a similar story. Call sentiment has gained the upper hand recently, with the put/call ratio at 0.41 — meaningfully below its 20-day average of 0.44, and closer to the lower end of its 52-week range. That's a shift from March, when the PCR was running close to 0.64. The stock has recovered 11% over the past month to close at $12.87, with a 5% gain just over the past week. Peers including and also put in strong weekly performances, suggesting some sector tailwinds behind the move rather than company-specific catalysts alone.
The analyst community remains split. Bulls at TD Cowen and KeyBanc hold Buy and Overweight ratings, with targets in the $20–$24 range — roughly 60–85% above the current price. UBS initiated Neutral in January and most recently cut its target to $13, barely above where the stock trades now. Goldman Sachs and Morgan Stanley both sit at Neutral. The average target across the Street is around $21, implying significant upside that the market has persistently refused to price in. The company runs deep in the red — estimates point to a net loss of around $116 million on revenues near $234 million — and the EBITDA figure is negative, so valuation is grounded entirely in future drug-discovery platform optionality rather than current earnings. The EPS surprise factor score sits at just the 3rd percentile, suggesting the company has a history of missing rather than beating. However, the 90-day EPS momentum score has climbed to the 95th percentile, indicating that forward estimates have been revised sharply higher recently — a disconnect that the print will either validate or unwind.
Insider activity adds a cautionary note. CEO Ramy Farid sold 43,000 shares on both April 16 and April 17, collecting roughly $1.05 million at prices around $12.20–$12.33. The broader 90-day net insider position is also negative. None of the sales appear to be large relative to the outstanding share count, and scheduled plan sales can explain routine executive activity, but the cluster of executive-level selling directly ahead of earnings is a data point bulls will need to look past. The Gates Foundation remains the largest holder at nearly 22% of shares, a structural anchor that has kept its position unchanged.
Today's print is less about whether Schrödinger's drug-discovery platform is working and more about whether a company burning through cash can deliver revenue and software-licensing numbers that justify the gap between a $13 stock and a $21 consensus target.
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