Semrush Holdings (SEMR) Stock Forecast & Price Target

SEMrush Holdings Inc. reported a robust 19.7% year-over-year increase in total revenues, driven by heightened interest in AI and growth in the enterprise segment, despite challenges in lower market demand. The company has demonstrated strong customer growth, with an 83% year-over-year increase in customers generating over $50,000 in annual recurring revenue (ARR), and a notable 15.3% growth in average revenue per customer (ARPC) bringing it to approximately $3,753. Furthermore, SEMrush is optimistic about its enterprise and AI opportunities, estimating that ARR from these segments could surpass $50 million by year-end, which supports its strategic reallocation of resources toward higher potential market segments.

SEMrush Holdings Inc. has revised its 2025 revenue outlook down to $443 million-$446 million due to weaker demand in the downmarket segment, representing a reduction in growth expectations from 19.6% to 18% at the midpoint. The company's gross margins have compressed by 290 basis points year-over-year to 80.7%, resulting in a gross profit miss that further highlights financial pressures. Additionally, the decrease in net dollar retention from 106% to 105% and a sequential decline in paid customer accounts by 2,000 underscore the challenges facing SEMrush, particularly in its freelancer customer segment.