Semrush Holdings (SEMR) Stock Forecast & Price Target

SEMrush Holdings Inc. demonstrated a robust financial performance with total revenues increasing by 19.7% year-over-year, driven by strong interest in AI and growth in enterprise customer segments, despite some limitations from weaker downmarket demand. The company reported an impressive 83% year-over-year increase in customers generating $50k+ annual recurring revenue (ARR) and a 15.3% growth in average revenue per customer (ARPC), reaching approximately $3,753. Additionally, total ARR expanded to $435.3 million, reflecting year-over-year growth of 15.3%, while the company's strategic focus on enterprise and AI opportunities positions it for continued expansion, with the expectation that ARR from these segments could exceed $50 million by year-end.

SEMrush Holdings Inc. has revised its 2025 revenue outlook downward to $443 million-$446 million, reflecting a growth rate decline to 18% from earlier projections of 19.6%, due to weaker demand in the downmarket segment. Additionally, the company experienced a 290 basis points year-over-year compression in gross margins, dropping to 80.7%, which resulted in a gross profit miss of $750,000. The net dollar retention rate also decreased sequentially from 106% to 105%, and there was a loss of 2,000 paid customer accounts, highlighting challenges in maintaining customer growth and retention amid increased costs and market pressures.