Needham analyst Scott Berg maintained a Buy rating on SEMrush Holdings (SEMR – Research Report) today and set a price target of $13.00.
Scott Berg has given his Buy rating to SEMrush Holdings due to a combination of factors. One of the main reasons is the impressive growth trajectory SEMrush is showing. The company has just reported its best-ever third-quarter bookings and its revenue growth, which was already considerable, is expected to accelerate even further in the next quarters. This acceleration is anticipated to be driven by improving sales trends and an upcoming pricing increase that should further bolster growth rates.
Moreover, SEMrush’s operating model is becoming more efficient, as evidenced by its record-high operating margins in the third quarter. The expectation is that these margins will continue to improve, reaching the mid-teens, thanks to recent enhancements in the company’s go-to-market strategy. Additionally, SEMrush is introducing new enterprise pricing and cross-selling modules, which should further enhance its average revenue per user growth story. Considering all these factors and the fact that SEMR shares are currently trading at 2.5 times FY24 revenues, Scott Berg believes SEMrush could be a top performer in the Small Cap segment if it continues to meet growth and profitability expectations.
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Based on the recent corporate insider activity of 45 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.
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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.
