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Semrush Holdings, Inc. (SEMR)
:SEMR
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SEMrush Holdings
(NYSE:SEMR)
72Outperform
Positive Factors
Enterprise Growth
Enterprise execution drove an 82% increase in $50k ARR customers and 40% growth of $10k ARR customers, highlighting the new up market sales motion.
Platform Strategy
The platform strategy is seeing strong healthy growth, with the SEO Enterprise platform gaining traction as 40 customers joined in 4Q, more than the rest of the year combined.
Product Development
The company announced the upcoming beta of an Enterprise AI Optimization product, which is believed to further aid its up market inertia.
Negative Factors
Client Churn
Low-end clients continue to churn at a faster than anticipated pace, impacting overall growth.
Revenue Guidance
FY25 revenue guidance bracketed consensus estimates, although the mid-point was below consensus and was likely the source of shares selling-off.
Stock Volatility
The stock has been quite volatile, rising over 50% mid-year, only to decline over 50% from peak levels.
SEMrush Holdings (SEMR) vs. S&P 500 (SPY)
Market Cap
$1.41B
Dividend YieldN/A
Average Volume (3M)798.24K
Price to Earnings (P/E)173.1
Beta (1Y)1.92
Revenue Growth22.47%
EPS Growth872.41%
CountryUS
Employees1,561
SectorTechnology
Sector Strength43
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.06
Shares Outstanding126,141,030
10 Day Avg. Volume651,168
30 Day Avg. Volume798,242
Financial Highlights & Ratios
PEG Ratio0.20
Price to Book (P/B)N/A
Price to Sales (P/S)3.88
Price to Cash Flow (P/CF)30.70
P/FCF Ratio38.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$17.00Price Target Upside77.64% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
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 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
9.57
Price Trends
13.95
Negative
13.59
Negative
13.68
Negative
Market Momentum
-1.10
Negative
31.02
Neutral
30.66
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 9.57 is below the 20-day moving average (MA) of 10.04, below the 50-day MA of 13.95, and below the 200-day MA of 13.68, indicating a bearish trend. The MACD of -1.10 indicates Negative momentum. The RSI at 31.02 is Neutral, neither overbought nor oversold. The STOCH value of 30.66 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 0 New Risks
SEMrush Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $1.41B | 173.06 | 3.46% | ― | 22.47% | 872.41% | |
67 Neutral | $30.36B | 6,784.50 | 0.29% | ― | 21.07% | ― | |
66 Neutral | $27.71B | 71.56 | 15.37% | ― | 25.63% | 118.49% | |
61 Neutral | $781.68M | ― | -18.61% | ― | 4.11% | -935.85% | |
61 Neutral | $3.15B | 39.30 | -41.63% | ― | 12.66% | 2097.85% | |
58 Neutral | $1.30B | ― | -39.88% | ― | 21.66% | 8.66% | |
58 Neutral | $21.03B | 10.28 | -16.29% | 2.47% | 4.45% | -23.80% |
* Technology Sector Average
Performance Comparison
SEMR
SEMrush Holdings
9.57
-3.96
-29.27%
HUBS
HubSpot
582.11
-54.74
-8.60%
TTD
Trade Desk
55.85
-31.46
-36.03%
YEXT
Yext
6.18
0.24
4.04%
SPT
Sprout Social
22.52
-36.08
-61.57%
DOCN
DigitalOcean Holdings
34.17
-4.00
-10.48%
SEMrush Holdings Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: -36.58% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Positive
The earnings call highlights strong financial performance with significant revenue growth and profitability, particularly driven by enterprise expansion and product development. However, there are challenges in the lower-end market segment and macroeconomic factors affecting certain customer cohorts.Highlights
Strong Revenue Growth
Fourth quarter revenue grew 23% year-over-year, and full-year revenue grew 22% to $376.8 million.
Significant Increase in Enterprise Deals
Closed over 40 enterprise SEO deals in December alone, more than the rest of the year combined, with 144 enterprise SEO customers by year-end.
High Cash Flow and Profitability
Generated $47 million in net cash from operating activities for 2024 and ended the year with $235.6 million in cash, cash equivalents, and short-term investments.
Expansion of Product Portfolio
Expanded product offerings including AI features in social media and launched a new enterprise-focused solution.
Increase in Key Customer Metrics
ARR from enterprise-sized customers was strong, with a 40% year-over-year increase in customers paying over $10,000.
Lowlights
Softness in Lower Market Segment
Continued softness in the lower end of the market, impacting dollar-based net revenue retention, which decreased slightly to 106%.
Macroeconomic Challenges
Acknowledged ongoing macroeconomic challenges affecting the smaller end of the market.
Company Guidance
In the fourth quarter of 2024, Semrush Holdings experienced significant growth, with revenue increasing by 23% year-over-year and annual recurring revenue (ARR) rising by 22% year-over-year, reaching $411.6 million. The company reported a non-GAAP income from operations of $11.8 million, resulting in a non-GAAP operating margin of 11.5%. For the entire year, Semrush achieved a revenue growth of 22% to $376.8 million and generated net cash from operating activities of $47 million. The company ended the year with cash, cash equivalents, and short-term investments totaling $235.6 million. The number of customers paying over $50,000 increased by 82% to 336, while the calculated average ARR per paying customer grew by nearly 13% to over $3,500. Semrush also successfully closed over 40 enterprise SEO deals in December 2024, contributing to a total of 144 enterprise SEO customers by year-end. Looking ahead to 2025, Semrush has projected first-quarter revenue between $103.9 million and $104.7 million and full-year revenue between $448 million and $453 million, representing approximately 20% growth at the midpoint. The company expects a non-GAAP operating margin of approximately 12% for 2025, with plans to launch an AI optimization solution in closed beta during the first half of the year.SEMrush Holdings Corporate Events
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.