SEMrush Holdings (SEMR) AI Stock Analysis

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SEMrush Holdings

(NYSE:SEMR)

Rating:68Neutral

Price Target:

$10.50

▲(9.03%Upside)

SEMrush Holdings demonstrates robust financial performance and positive earnings call outcomes, highlighting successful strategic initiatives. However, technical analysis indicates bearish momentum, and high valuation metrics suggest overvaluation, balancing the overall stock score.

Positive Factors

Earnings

SEMR reported a solid 1Q with Enterprise SEO momentum and cross-sell/upsell traction driving 20%+ growth results.

Product Development

New product offerings, like the company's AIO offering, are expected to drive upsell and cross-sell opportunities.

Negative Factors

Customer Churn

The platform strategy is seeing strong healthy growth, but low-end clients continue to churn at a faster than anticipated pace.

Forex Impact

The stock is trading down on new FX expenses along with lighter than anticipated customer and Net ARR additions.

SEMrush Holdings (SEMR) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$1.43B

Dividend YieldN/A

Average Volume (3M)577.92K

Price to Earnings (P/E)207.1

Beta (1Y)1.71

Revenue Growth22.75%

EPS Growth-47.45%

CountryUS

Employees1,561

SectorTechnology

Sector Strength77

IndustrySoftware - Application

Share Statistics

EPS (TTM)0.07

Shares Outstanding127,163,650

10 Day Avg. Volume645,034

30 Day Avg. Volume577,922

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

$15.29

Price Target Upside58.77% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering7

SEMrush Holdings Business Overview & Revenue Model

Company DescriptionSEMrush Holdings (SEMR) is a global leader in online visibility management and content marketing SaaS platforms. The company operates in the digital marketing sector, providing a comprehensive suite of tools designed to enhance online presence, perform competitive analysis, and optimize digital marketing campaigns. SEMrush's core services include SEO optimization, content marketing, market research, advertising, and social media management, catering to businesses of all sizes seeking to improve their online reach and engagement.

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

Customers
Tracks the number of active customers, providing a clear view of market penetration and the effectiveness of SEMrush’s sales and marketing strategies.

Chart InsightsSEMrush Holdings has shown consistent growth in its customer base, reaching 118,000 by Q1 2025. This is bolstered by a strategic focus on enterprise clients, as evidenced by a significant increase in high-value deals and enterprise SEO customers. However, challenges persist in the lower market segment due to macroeconomic pressures, which could impact future growth. The company's emphasis on product development, including AI solutions, aims to sustain momentum and drive further expansion in 2025.

Data provided by:

Main Street Data

SEMrush Holdings Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q1-2025)

% Change Since: -5.77%|

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 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

Very Positive

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.

Balance Sheet

Positive

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.

Cash Flow

Very Positive

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.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
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

Technical Analysis Sentiment

Negative

Last Price9.63

Price Trends

50DMA

9.80

Positive

100DMA

12.12

Negative

200DMA

12.89

Negative

Market Momentum

MACD

0.02

Positive

RSI

47.77

Neutral

STOCH

18.69

Positive

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 9.63 is below the 20-day moving average (MA) of 10.37, below the 50-day MA of 9.80, and below the 200-day MA of 12.89, indicating a neutral trend. The MACD of 0.02 indicates Positive momentum. The RSI at 47.77 is Neutral, neither overbought nor oversold. The STOCH value of 18.69 is Positive, 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

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 (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CXM	75 Outperform	$2.07B	17.70	18.83%	―	8.74%	150.66%
DSP	69 Neutral	$843.40M	447.84	4.15%	―	30.64%	―
SEMR	68 Neutral	$1.43B	207.10	2.81%	―	22.75%	-47.45%
SPT	63 Neutral	$1.24B	―	-36.95%	―	17.79%	16.49%
AMPL	63 Neutral	$1.58B	―	-32.87%	―	8.56%	-4.21%
Sector *	61 Neutral	$11.29B	10.17	-6.88%	2.97%	7.41%	-8.93%
PRO	59 Neutral	$825.46M	―	29.80%	―	7.97%	74.22%

* Technology Sector Average

Performance Comparison

SEMR

SEMrush Holdings

10.06

-5.51

-35.39%

PRO

PROS Holdings

17.25

-14.67

-45.96%

SPT

Sprout Social

21.51

-11.54

-34.92%

DSP

Viant Technology

13.98

4.21

43.09%

CXM

Sprinklr

8.31

-3.63

-30.40%

AMPL

Amplitude

12.64

3.13

32.91%

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.

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.