Semrush Holdings (SEMR) Stock Forecast & Price Target

SEMrush Holdings Inc. reported a robust total revenue increase of 19.7% year-over-year, driven significantly by growing interest in AI technologies and the expansion of enterprise customer relationships, particularly in large customer cohorts. The growth metrics reveal an 83% increase in customers generating over $50,000 in annual recurring revenue (ARR) and a 15.3% growth in average revenue per customer, reflecting a strong demand for its software-as-a-service offerings. Additionally, the company maintains a positive outlook on the enterprise and AI segments, forecasting potential ARR growth exceeding $50 million by the end of the year, further underscoring its strategic shift towards higher-value market segments.

SEMrush Holdings Inc. has revised its 2025 revenue outlook downward due to weaker demand in the downmarket segment, resulting in a forecast of $443 million to $446 million, indicating a slowdown in growth rates compared to earlier estimates. The company's gross margins have compressed by 290 basis points year-over-year to 80.7%, alongside a decrease in net dollar retention from 106% to 105% and a sequential decline in paid customer accounts by 2,000. Additionally, SEMrush's non-GAAP earnings per share fell short of expectations, with reported figures of $0.06 compared to an estimated $0.08, highlighting ongoing financial pressures and challenges within its customer base.