Analyzing Tempus AI (NASDAQ:TEM) and Schrodinger (NASDAQ:SDGR)

Schrodinger (NASDAQ:SDGR) and Tempus AI (NASDAQ:TEM) are both medical companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, risk, profitability, valuation, dividends, institutional ownership and analyst recommendations.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Schrodinger and Tempus AI, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Schrodinger	1	4	4	0	2.33
Tempus AI	1	4	8	0	2.54

Schrodinger presently has a consensus price target of $21.13, indicating a potential upside of 82.43%. Tempus AI has a consensus price target of $75.92, indicating a potential upside of 60.21%. Given Schrodinger’s higher probable upside, equities research analysts plainly believe Schrodinger is more favorable than Tempus AI.

Profitability

This table compares Schrodinger and Tempus AI’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Schrodinger	-40.37%	-29.47%	-14.69%
Tempus AI	-19.27%	-53.30%	-11.28%

Valuation and Earnings

This table compares Schrodinger and Tempus AI”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Schrodinger	$255.87 million	3.34	-$103.26 million	($1.42)	-8.15
Tempus AI	$1.27 billion	6.66	-$245.03 million	($1.41)	-33.61

Schrodinger has higher earnings, but lower revenue than Tempus AI. Tempus AI is trading at a lower price-to-earnings ratio than Schrodinger, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Schrodinger has a beta of 1.62, suggesting that its share price is 62% more volatile than the S&P 500. Comparatively, Tempus AI has a beta of 4.9, suggesting that its share price is 390% more volatile than the S&P 500.

Insider & Institutional Ownership

79.1% of Schrodinger shares are held by institutional investors. Comparatively, 24.2% of Tempus AI shares are held by institutional investors. 21.0% of Schrodinger shares are held by insiders. Comparatively, 26.3% of Tempus AI shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Tempus AI beats Schrodinger on 9 of the 14 factors compared between the two stocks.

About Schrodinger

Schrödinger, Inc., together with its subsidiaries, develops physics-based computational platform that enables discovery of novel molecules for drug development and materials applications. The company operates in two segments, Software and Drug Discovery. The Software segment is focused on licensing its software to transform molecular discovery for life sciences and materials science industries. The Drug Discovery segment focuses on building a portfolio of preclinical and clinical programs, internally and through collaborations. The company serves biopharmaceutical and industrial companies, academic institutions, and government laboratories worldwide. Schrödinger, Inc. was incorporated in 1990 and is based in New York, New York.

About Tempus AI

Tempus AI Inc. is a technology company advancing precision medicine through the practical application of artificial intelligence principally in healthcare. The company provides AI-enabled precision medicine solutions to physicians to deliver personalized patient care and in parallel facilitates discovery, development and delivery of optimal therapeutics. Tempus AI Inc. is based in CHICAGO.