Semrush Holdings (SEMR) Stock Forecast & Price Target

SEMrush Holdings Inc. demonstrated robust financial performance, reporting a 19.7% year-over-year increase in total revenues driven by strong interest in AI and enterprise solutions, despite some downmarket demand challenges. Notably, the company experienced substantial growth in its large customer cohorts, with an 83% increase in customers generating over $50,000 in annual recurring revenue (ARR) and a 15.3% growth in average revenue per customer. With a total ARR of $435.3 million and promising projections for enterprise and AI segments, the company is strategically reallocating resources to capitalize on higher growth opportunities, reflecting optimism in its future financial trajectory.

SEMrush Holdings Inc. has revised its 2025 revenue outlook downward to a range of $443 million to $446 million, which reflects a deceleration in growth estimates from previous projections and indicates a weak demand environment, particularly in its downmarket segments. Additionally, the company experienced a compression of gross margins by 290 basis points year-over-year, resulting in an absolute gross profit miss, while net dollar retention decreased from 106% to 105%, highlighting challenges in customer retention. Furthermore, a decline in paid customer accounts, particularly among freelancers and downmarket customers, has adversely affected overall customer growth and led to a downward revision of the full-year revenue guidance.