Semrush Holdings (SEMR) Stock Forecast & Price Target

SEMrush Holdings Inc. reported a total revenue increase of 19.7% year-over-year, primarily driven by heightened interest in AI and the strength of its enterprise segment, despite challenges in the downmarket. The company experienced substantial growth in large customer cohorts, with an 83% year-over-year increase in customers generating over $50,000 in annual recurring revenue (ARR) and a year-over-year growth of 15.3% in average revenue per customer (ARPC), reaching approximately $3,753. Additionally, SEMrush's continued optimism regarding its enterprise and AI segments, with expectations to exceed $50 million in ARR from these areas by year-end, positions the company favorably for future growth.

SEMrush Holdings Inc has revised its 2025 revenue outlook downward due to weaker demand in its downmarket segment, reflecting a growth projection of 18% at the midpoint, which is a decline from previous estimates of 19.6%. Additionally, the company's gross margins compressed by 290 basis points year-over-year, falling short of expectations and resulting in a gross profit miss of $750,000. The decline in net dollar retention from 106% to 105% and a decrease in paid customer accounts by 2,000 further highlight challenges in the company's customer base and overall market conditions.