Munger Mode rating: 2 out of 5 — Sell. Our own rating from the research report below, on business quality first: moat durability and management, with price separating the top three.
We have spent our lives looking for businesses we can understand, with earnings we can count, protected by moats we can see widening. Schrödinger presents us with the opposite: a genuinely impressive scientific franchise wrapped inside a financial structure that has produced twenty-plus consecutive years of operating losses, revenue that lurches around on milestone payments and accounting transitions, and a valuation that rests substantially on things that haven't happened yet — drug royalties that may never flow, milestones that may never trigger, and an AI product launched last month. The software business is real and differentiated. The balance sheet is a fortress — roughly $419 million of cash and securities against no debt. Management is honest and scientifically credible.
Recent filings analysed: 10-Q (2026-08-05), 8-K (2026-08-05), 8-K (2026-06-29), 8-K (2026-06-23).
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