SEMrush Holdings (SEMR – Research Report), the Technology sector company, was revisited by a Wall Street analyst today. Analyst Scott Berg from Needham reiterated 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 including SEMrush Holdings’s robust first quarter results for 2024. SEMrush showcased over 20% growth in revenue and a continued increase in operating margins. The firm also demonstrated a reacceleration in customer growth post a unique holiday season while maintaining a net revenue retention (NRR) rate of 107%, which is anticipated to be the lowest point, suggesting stability and potential growth.
Furthermore, Berg is optimistic about SEMrush’s future, particularly in the second half of 2024, due to the launch of a new Enterprise SEO platform and an enhanced AI monetization strategy, which are expected to further drive average revenue per user (ARPU) and NRR. The significant improvements in profitability, with a year-over-year increase of 2,040 basis points, have reinforced the belief in a reliable trajectory towards a 20% margin against the backdrop of ongoing 20% revenue growth. Consequently, Berg has not only reiterated the Buy rating but also raised the price target to $18, reflecting a 5.6x multiple on the firm’s fiscal year 2025 revenue estimates.
In another report released yesterday, Jefferies also reiterated a Buy rating on the stock with a $17.00 price target.
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SEMrush Holdings (SEMR) Company Description:
SEMrush Holdings Inc is engaged in the provision of an online visibility management software-as-a-service platform. Its platform enables subscribers to improve their online visibility and drive traffic, including on their websites and social media pages, and distribute highly relevant content to their customers on a targeted basis across various channels to drive high-quality traffic and measure the effectiveness of their digital marketing campaigns. Geographically, it generates revenues from the US, the UK, and other regions.
