Similarweb (SMWB) AI Stock Analysis

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Similarweb

(NYSE:SMWB)

56Neutral

Similarweb's stock score reflects a mix of strong revenue growth and positive non-GAAP profitability, tempered by ongoing profitability challenges and high leverage. Technical indicators point to a bearish trend, and valuation metrics are negatively impacted by the lack of profitability. The positive earnings call provides some optimism, but operational and forex challenges remain.

Positive Factors

Market Opportunity

Similarweb targets a large total addressable market estimated at $52B, highlighting significant growth potential.

Partnerships

Partnerships with Bloomberg and S&P validate Similarweb’s platform.

Stock Valuation

The stock is now trading at just 3 times revenue, which suggests a 30%-plus sell-off seems overdone.

Negative Factors

Profitability Guidance

Shares are down 31% as Similarweb’s 2025 operating margin guide missed expectations.

Revenue Expectations

2025 revenue and profitability guidance came in well below Street expectations due to some deal slippage.

Sales Execution

Disappointing results and outlook raise questions about sales execution and internal targets.

Similarweb (SMWB) vs. S&P 500 (SPY)

Market Cap

$624.53M

Dividend YieldN/A

Average Volume (3M)358.08K

Price to Earnings (P/E)―

Beta (1Y)0.91

Revenue Growth14.63%

EPS Growth62.75%

CountryUS

Employees1,085

SectorTechnology

Sector Strength64

IndustryInternet Content & Information

Share Statistics

EPS (TTM)-0.14

Shares Outstanding82,829,430

10 Day Avg. Volume363,431

30 Day Avg. Volume358,077

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap1.81

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit5.78

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$16.14

Price Target Upside113.21% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering8

Similarweb Business Overview & Revenue Model

Company DescriptionSimilarweb Ltd. (NASDAQ: SMWB) is a global leader in digital intelligence, providing comprehensive insights into online behavior and market trends. The company operates within the digital analytics and market research sectors, offering a suite of products that help businesses understand web traffic, market dynamics, and competitive landscapes. Similarweb's core services include web analytics, competitive analysis, and industry benchmarking, which enable businesses to optimize their digital strategies, identify growth opportunities, and make data-driven decisions.

How the Company Makes MoneySimilarweb generates revenue primarily through subscription-based services offered to businesses seeking in-depth digital intelligence and competitive insights. Its main revenue streams include enterprise subscriptions, which provide clients with access to advanced analytics and reporting tools tailored to their specific needs. Additionally, the company monetizes its platform by offering tailored solutions and consultancy services, helping organizations leverage its data for strategic decision-making. Significant partnerships with technology companies and market research firms also enhance its service offerings and expand its customer base, contributing to its overall earnings.

Similarweb Financial Statement Overview

Summary

Similarweb demonstrates strong revenue growth and improved cash flow management, but persistent profitability issues and high leverage pose risks. Continued focus on improving profitability and maintaining cash flow improvements will be crucial for long-term stability.

Income Statement

Positive

Similarweb has shown consistent revenue growth over the years, with a 14.63% increase in 2024 compared to 2023. However, the company continues to struggle with profitability as evidenced by negative EBIT and net income margins. The gross profit margin is healthy at 78.08%, indicating strong product pricing or cost management, but the net profit margin is negative, highlighting profitability challenges.

Balance Sheet

Neutral

The company has a high debt-to-equity ratio, indicating reliance on debt financing, which could pose risks in a high-interest-rate environment. However, the equity ratio has improved, suggesting better asset management. The return on equity remains negative due to consecutive net losses, reflecting ongoing challenges in generating shareholder value.

Cash Flow

Positive

There is a significant improvement in operating cash flow, turning positive in 2024 from a negative position in 2023, suggesting better cash management. The free cash flow has also improved, indicating better capital expenditure management. However, the company needs to continue focusing on sustaining these improvements to stabilize its financial health.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
249.91M	218.02M	193.23M	137.67M	93.49M
	Gross Profit
195.10M	170.93M	139.96M	105.92M	72.07M
	EBIT
-9.66M	-28.81M	-87.86M	-66.11M	-19.67M
	EBITDA
864.00K	-18.55M	-77.27M	-62.94M	-17.71M
	Net Income Common Stockholders
-11.46M	-29.37M	-83.66M	-68.98M	-22.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
63.87M	71.73M	77.81M	128.88M	53.94M
	Total Assets
242.91M	239.01M	246.04M	227.00M	103.63M
	Total Debt
39.73M	67.42M	74.17M	0.00	26.85M
	Net Debt
-24.14M	-4.31M	-3.64M	-128.88M	2.91M
	Total Liabilities
215.40M	223.47M	224.09M	142.09M	112.88M
	Stockholders Equity
27.51M	15.55M	21.95M	84.91M	-9.25M
Cash Flow		Free Cash Flow
27.44M	-5.42M	-77.24M	-30.74M	-4.89M
	Operating Cash Flow
30.17M	-3.04M	-46.06M	-27.63M	-3.76M
	Investing Cash Flow
-18.70M	-2.59M	-33.01M	7.36M	-30.76M
	Financing Cash Flow
-18.84M	1.19M	29.12M	125.25M	51.23M

Similarweb Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price7.57

Price Trends

50DMA

8.36

Negative

100DMA

11.49

Negative

200DMA

10.21

Negative

Market Momentum

MACD

-0.35

Negative

RSI

46.80

Neutral

STOCH

77.03

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SMWB, the sentiment is Neutral. The current price of 7.57 is above the 20-day moving average (MA) of 7.17, below the 50-day MA of 8.36, and below the 200-day MA of 10.21, indicating a neutral trend. The MACD of -0.35 indicates Negative momentum. The RSI at 46.80 is Neutral, neither overbought nor oversold. The STOCH value of 77.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SMWB.

Similarweb Risk Analysis

Similarweb disclosed 83 risk factors in its most recent earnings report. Similarweb 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

Similarweb Peers Comparison

Overall Rating

UnderperformOutperform

Sector (59)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SSTK	70 Outperform	$557.01M	15.84	6.87%	7.32%	6.94%	-66.92%
GETY	67 Neutral	$788.00M	20.04	6.07%	―	2.48%	103.37%
Sector *	59 Neutral	$10.65B	10.45	-6.56%	3.01%	7.31%	-12.18%
SMWB	56 Neutral	$624.53M	―	-53.22%	―	14.63%	62.75%
TRVG	54 Neutral	$292.48M	―	-11.75%	―	0.77%	87.59%
IZEA	45 Neutral	$35.01M	―	-33.05%	―	-0.92%	-140.08%
FENG	44 Neutral	$25.82M	―	-4.47%	―	0.22%	49.14%

* Technology Sector Average

Performance Comparison

SMWB

Similarweb

7.54

0.05

0.67%

FENG

Phoenix New Media

2.15

0.05

2.38%

SSTK

Shutterstock

15.96

-24.06

-60.12%

IZEA

IZEA Worldwide

2.07

-0.96

-31.68%

TRVG

trivago

4.16

1.65

65.74%

GETY

Getty Images Holdings

1.91

-1.88

-49.60%

Similarweb Earnings Call Summary

Earnings Call Date:Feb 11, 2025

(Q4-2024)

% Change Since: -54.89%|

Next Earnings Date:May 13, 2025

Earnings Call Sentiment Positive

The earnings call presented a largely positive outlook with significant revenue growth, customer expansion, and strategic partnerships. While there are challenges such as increased expenses and forex pressure, the company remains optimistic about future opportunities and profitability.

Q4-2024 Updates

Positive Updates

Revenue Growth

Revenue for the year was nearly $250 million, up 15% year-over-year, with Q4 revenue up 16% year-over-year.

Customer Base Expansion

Customer base grew 17% year-over-year, ending with more than 5,500 ARR customers. Additionally, 15 customer contracts were signed in Q4, each worth 7-digit contract values.

Strategic Partnerships

New customer relationships with S&P Global and Bloomberg Professional Services were announced, highlighting the strength of Similarweb's data assets.

Non-GAAP Profitability

Achieved first full financial year of non-GAAP operating profit, with a Rule of 26 performance combining growth and profitability.

Strong Performance Indicators

NRR for over $100,000 ARR customers was 112%, up from 107% last year. 49% of ARR is contracted under multiyear contracts, up from 42% last year.

Negative Updates

Increased Operational Expenses

Increased investment in R&D and go-to-market teams expected to reduce operating profit in the short term.

Forex Pressure

Forex headwinds impacted Q4 and Q1, contributing to a softer financial performance.

Soft Q4 Execution

Q4 execution was described as 'soft,' with some areas experiencing low performance and managerial changes impacting results.

Company Guidance

During the Similarweb fourth quarter fiscal year 2024 earnings call, the company reported revenue of nearly $250 million for the year, marking a 15% year-over-year increase, with Q4 revenue up 16% compared to the previous year. The customer base grew by 17% year-over-year, totaling over 5,500 ARR customers, and the company signed 15 seven-figure contracts in Q4. The net revenue retention (NRR) for customers with over $100,000 ARR improved to 112%, and 49% of ARR was contracted under multiyear agreements. Similarweb achieved a non-GAAP operating margin of 4% in Q4 and 6% for the full year, along with a free cash flow margin of 11%. Looking forward to 2025, the company expects revenue between $285 million and $288 million, representing a 15% year-over-year growth at the midpoint, with Q1 revenue anticipated to be between $66 million and $66.5 million. The guidance incorporates increased operating expenses related to investments in R&D and go-to-market strategies, aiming to capitalize on opportunities presented by AI and LLM technologies.

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.