SEMrush Holdings: Strong Enterprise SEO Growth and Strategic Focus Justify Buy Rating

SEMrush Holdings (SEMR – Research Report), the Technology sector company, was revisited by a Wall Street analyst today. Analyst Scott Berg from Needham maintained a Buy rating on the stock and has a $18.00 price target.

Scott Berg has given his Buy rating due to a combination of factors that highlight SEMrush Holdings’ strong performance and future potential. The company reported impressive first-quarter results, driven by significant momentum in Enterprise SEO and effective cross-selling and upselling strategies, leading to over 20% growth. Despite facing some challenges such as new foreign exchange expenses and lighter than expected customer and Net ARR additions, these are attributed to a shift in focus towards higher-value enterprise customers, which is expected to yield long-term benefits.
A key highlight is the growth in Enterprise SEO, with around 200 customers now spending an average of $60,000, surpassing expectations and contributing significantly to the company’s ARR. This success sets a promising outlook for 2025, with potential for further expansion as more product offerings become available. The introduction of new products like the AIO offering is expected to enhance upsell and cross-sell opportunities, supporting continued growth and justifying the Buy rating.

In another report released today, KeyBanc also maintained a Buy rating on the stock with a $16.00 price target.

Based on the recent corporate insider activity of 80 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of SEMR in relation to earlier this year.