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SEMrush Holdings (SEMR)
NYSE:SEMR
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SEMrush Holdings
(NYSE:SEMR)
Rating:68Neutral
Price Target:
$10.50
▲( 8.02% Upside)
Positive Factors
Enterprise Growth
Enterprise SEO momentum and cross-sell/upsell traction are driving over 20% growth results.
Market Position
Semrush is positioned to accelerate growth with a large enterprise product opportunity.
Product Innovation
New product offerings, like the company's AIO offering, are expected to drive upsell and cross-sell opportunities.
Negative Factors
Customer Churn
Low-end clients continue to churn at a faster than anticipated pace.
Foreign Exchange Expenses
The stock is trading down due to new FX expenses.
Leadership Change
A surprise came with co-founder and CEO Oleg Shchegolev moving into the role of CTO with BoD member Bill Wagner set to succeed him as CEO.
SEMrush Holdings (SEMR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.61B
Dividend YieldN/A
Average Volume (3M)526.66K
Price to Earnings (P/E)209.0
Beta (1Y)1.65
Revenue Growth22.75%
EPS Growth-47.45%
CountryUS
Employees1,561
SectorTechnology
Sector Strength76
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.07
Shares Outstanding127,163,650
10 Day Avg. Volume590,961
30 Day Avg. Volume526,658
Financial Highlights & Ratios
PEG Ratio-5.62
Price to Book (P/B)5.55
Price to Sales (P/S)0.00
P/FCF Ratio40.37
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$15.29Price Target Upside57.30% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
SEMrush Holdings Business Overview & Revenue Model
Company DescriptionSemrush Holdings, Inc. develops an online visibility management software-as-a-service platform worldwide. The company enables companies to identify and reach the right audience for their content through the right channels. Its platform enables the company's customers to understand trends and act upon insights to enhance the online visibility, and drive traffic to their websites and social media pages, as well as online listings, distribute targeted content to their customers, and measure the digital marketing campaigns. The company was founded in 2008 and is headquartered in Boston, Massachusetts.
How the Company Makes MoneySEMrush makes money primarily through a subscription-based revenue model. Customers pay for access to its platform on a monthly or annual basis, with different pricing tiers depending on the features and level of service required. The key revenue streams include subscriptions from its suite of digital marketing tools, which are segmented into various plans tailored for individuals, small businesses, and enterprises. SEMrush also generates revenue through partnerships and integrations with other digital marketing and analytics platforms, which enhance the value of its offerings. Additionally, the company may offer training and certification programs for digital marketing professionals, contributing to its earnings.
SEMrush Holdings Key Performance Indicators (KPIs)
Any
Customers
Tracks the number of active customers, providing a clear view of market penetration and the effectiveness of SEMrush’s sales and marketing strategies.
Tracks the number of active customers, providing a clear view of market penetration and the effectiveness of SEMrush’s sales and marketing strategies.
Data provided by:
Main Street Data
Main Street DataSEMrush Holdings Financial Statement Overview
Summary
SEMrush Holdings exhibits a strong financial performance marked by substantial revenue and cash flow growth, coupled with improving profitability and efficient cost management. The company's low leverage and strong equity position support financial stability. However, there remains an opportunity to enhance profitability margins further to optimize overall financial health. The robust cash flow generation positions the company well for future growth and investment opportunities.Income Statement
SEMrush Holdings demonstrates a strong revenue growth trajectory with Total Revenue increasing from $307.7 million in 2023 to $376.8 million in 2024, indicating a revenue growth rate of 22.48%. The Gross Profit Margin is robust at 82.63% for 2024, reflecting effective cost management. The transition from a negative EBIT of $-7.67 million in 2023 to a positive $8.31 million in 2024 signifies significant operational improvement. Net Income also improved from $0.95 million in 2023 to $8.24 million in 2024, resulting in a Net Profit Margin of 2.19%. Despite this, the net profit margin remains relatively low, suggesting room for improvement in profitability.82
Very Positive
Balance Sheet
The company maintains a solid financial position with a Debt-to-Equity Ratio of 0.05, reflecting low leverage and prudent financial management. The Return on Equity (ROE) improved to 3.21% in 2024 from 0.43% in 2023, indicating better utilization of shareholder's equity. The Equity Ratio of 65.63% suggests a strong equity base relative to total assets, enhancing financial stability. However, the moderate ROE highlights potential inefficiencies in generating profit from equity.75
Positive
Cash Flow
SEMrush Holdings shows impressive cash flow performance with a substantial increase in Free Cash Flow from $0.335 million in 2023 to $43.19 million in 2024, marking a significant growth rate. The Operating Cash Flow to Net Income Ratio is high at 5.71, suggesting efficient cash generation relative to net income. The Free Cash Flow to Net Income Ratio of 5.24 further underscores strong cash flow management and liquidity. These metrics highlight the company's capability to generate cash, essential for sustaining operations and funding growth.88
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 376.81M | 307.68M | 254.32M | 188.00M | 124.88M | Gross Profit |
| 311.34M | 255.35M | 205.76M | 146.07M | 94.94M | EBIT |
| 8.31M | -7.67M | -25.11M | -2.49M | -6.14M | EBITDA |
| 8.31M | -306.00K | -19.03M | 1.05M | -4.66M | Net Income Common Stockholders |
| 8.24M | 950.00K | -33.85M | -3.29M | -7.01M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 235.57M | 238.57M | 237.54M | 269.67M | 35.53M | Total Assets |
| 390.94M | 331.49M | 298.69M | 300.07M | 54.96M | Total Debt |
| 12.27M | 14.61M | 12.62M | 0.00 | 0.00 | Net Debt |
| -36.60M | -44.24M | -67.14M | -269.67M | -35.53M | Total Liabilities |
| 124.59M | 107.17M | 98.79M | 74.53M | 61.80M | Stockholders Equity |
| 256.60M | 219.15M | 199.90M | 225.54M | -6.84M |
| Cash Flow | Free Cash Flow | |||
| 43.19M | 335.00K | -15.56M | 19.98M | 2.45M | Operating Cash Flow |
| 47.00M | 7.99M | -9.62M | 23.76M | 5.85M | Investing Cash Flow |
| -58.22M | -29.07M | -179.83M | -4.63M | -6.08M | Financing Cash Flow |
| 1.87M | -19.00K | -345.00K | 215.32M | -1.67M |
SEMrush Holdings Technical Analysis
Negative
9.72
Price Trends
9.79
Positive
12.16
Negative
12.92
Negative
Market Momentum
0.10
Positive
43.18
Neutral
34.10
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SEMR, the sentiment is Negative. The current price of 9.72 is below the 20-day moving average (MA) of 10.42, below the 50-day MA of 9.79, and below the 200-day MA of 12.92, indicating a neutral trend. The MACD of 0.10 indicates Positive momentum. The RSI at 43.18 is Neutral, neither overbought nor oversold. The STOCH value of 34.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SEMR.
SEMrush Holdings Risk Analysis
SEMrush Holdings disclosed 42 risk factors in its most recent earnings report. SEMrush Holdings reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 1 New Risks
1.
As we acquire and invest in companies or technologies, we may not realize expected business or financial benefits and the acquisitions or investments could prove difficult to integrate, disrupt our business, dilute stockholder value and adversely affect our business, results of operations, and financial condition. Q4, 2024
SEMrush Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $2.13B | 17.74 | 18.83% | ― | 8.74% | 150.66% | |
69 Neutral | $916.60M | 461.79 | 4.15% | ― | 30.64% | ― | |
68 Neutral | $1.61B | 209.03 | 2.81% | ― | 22.75% | -47.45% | |
63 Neutral | $1.31B | ― | -36.95% | ― | 17.79% | 16.49% | |
63 Neutral | $1.59B | ― | -32.87% | ― | 8.56% | -4.21% | |
60 Neutral | $11.56B | 10.24 | -7.04% | 2.94% | 7.46% | -10.54% | |
59 Neutral | $866.13M | ― | 29.80% | ― | 7.97% | 74.22% |
* Technology Sector Average
Performance Comparison
SEMR
SEMrush Holdings
9.84
-5.99
-37.84%
PRO
PROS Holdings
17.25
-13.94
-44.69%
SPT
Sprout Social
21.69
-10.23
-32.05%
DSP
Viant Technology
13.86
4.63
50.16%
CXM
Sprinklr
8.20
-3.79
-31.61%
AMPL
Amplitude
12.31
2.88
30.54%
SEMrush Holdings Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: -4.89%|
Next Earnings Date:Aug 11, 2025
Earnings Call Sentiment Positive
The earnings call was largely positive, highlighting strong revenue growth, successful product launches, and increased adoption of enterprise solutions. However, there are some concerns regarding exchange rate impacts and retention metrics.Q1-2025 Updates
Positive Updates
Strong Revenue Growth
Revenue for Q1 2025 was $105 million, representing over 22% year-over-year growth and exceeding the high-end of the guidance.
Enterprise SEO Solution Success
The Enterprise SEO Solution has nearly 200 paying customers with an average ARR per customer of approximately $60,000, almost 20% higher than previous expectations.
AI Product Adoption
AI products, including the AI Toolkit, have grown to over $4 million in ARR. The AI Toolkit quickly became one of the fastest-growing new products in the company's history.
Positive Financial Performance
Non-GAAP operating margin was 11.6%, and free cash flow margin increased by 360 basis points over the previous year.
Increase in High-Value Customers
The number of customers paying over $50,000 increased 86% year-over-year to 388, and over 5,000 customers are paying over $10,000, which grew approximately 40% year-over-year.
Negative Updates
Exchange Rate Impact
Incremental $8 million expense headwind due to fluctuations in exchange rates, impacting full-year non-GAAP operating margin guidance.
Seasonal ARR Dynamics
ARR growth for the quarter was slightly below 20%, attributed to seasonality and a strategic focus on higher value customers, which may affect perceived growth momentum.
Dollar-Based Net Revenue Retention
Dollar-based net revenue retention was 106%, slightly lower than expected, suggesting some retention challenges despite strong enterprise momentum.
Company Guidance
During the Semrush First Quarter 2025 Earnings Conference Call, the company outlined its guidance for the upcoming periods and highlighted key performance metrics. Semrush reported a Q1 revenue of $105 million, marking a 22% year-over-year increase and surpassing their guidance's high-end. The non-GAAP operating margin stood at 11.6%, and the free cash flow margin improved by 360 basis points compared to the previous year. Their Enterprise SEO Solution gained traction with nearly 200 customers, each averaging $60,000 in annual recurring revenue (ARR), which exceeded prior expectations by 20%. The company's AI products, including the newly launched AI Toolkit, contributed over $4 million in ARR, positioning it as one of the fastest-growing products in Semrush's history. For Q2 2025, Semrush expects revenue between $108.2 million and $109.2 million, aiming for a 20% year-over-year growth at the midpoint, while maintaining a non-GAAP operating margin of around 11%. The full-year 2025 revenue guidance remains at $448 million to $453 million, with a non-GAAP operating margin goal of approximately 12%, despite an $8 million headwind due to exchange rate shifts. The company's cash and short-term investments rose to $261.8 million, up by $26.2 million, while ARR for the quarter reached $424.7 million, representing a 20% year-over-year increase. Semrush's calculated average ARR per customer rose to over $3,600, a 14% year-over-year growth, and the number of customers exceeding $50,000 in payments grew by 86% to 388. The company is focused on expanding its enterprise segment and further leveraging AI advancements to drive future growth.SEMrush Holdings Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
SEMrush Holdings Expands Board with New Director
Positive
May 5, 2025
On April 29, 2025, Semrush Holdings, Inc. announced the expansion of its Board of Directors from eight to nine members, appointing Caroline Tsay as an independent director effective May 1, 2025. Tsay, who brings over 20 years of experience in the technology sector, is expected to contribute significantly to the company’s strategic direction as it accelerates innovation at the intersection of AI and marketing. Her appointment is anticipated to enrich boardroom discussions and support Semrush’s continued growth.
Executive/Board ChangesBusiness Operations and StrategyFinancial Disclosures
SEMrush Holdings Announces Leadership Changes for 2025
Positive
Feb 26, 2025
On February 22, 2025, Semrush Holdings announced significant leadership changes effective March 10, 2025. Co-Founder Oleg Shchegolev will transition from CEO to CTO, focusing on product innovation and AI, while William Wagner, a seasoned SaaS industry veteran, will assume the role of CEO. These changes aim to leverage Shchegolev’s expertise in technology and Wagner’s experience in scaling software companies to drive Semrush’s growth and innovation. The company also reported strong financial performance for the fourth quarter and full year 2024, with revenue growth of 23% and 22% year-over-year, respectively, and a positive outlook for 2025.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.