Semrush Holdings (SEMR) Stock Forecast & Price Target

SEMrush Holdings Inc demonstrated robust growth, with total revenues increasing by 19.7% year-over-year, primarily driven by heightened interest in AI and strong performance from enterprise-level clients. The company also saw significant expansion in its customer base, highlighted by an 83% year-over-year increase in customers contributing $50,000 or more in annual recurring revenue (ARR), alongside a 35% rise in customers paying $10,000 or more annually. This positive trend in customer growth, particularly among larger cohorts, underscores the company’s potential for sustained revenue generation and market resilience despite some challenges in downmarket demand.

SEMrush Holdings Inc. has adjusted its 2025 revenue outlook downward, now projecting a range of $443 million to $446 million, indicating a growth rate of 18% at the midpoint, compared to previous estimates that suggested a growth of 19.6%. Additionally, the company experienced a compression in gross margins by 290 basis points year-over-year, landing at 80.7%, which was notably below internal estimates and resulted in a gross profit miss of $750,000. These indicators of weakening demand and declining profitability contribute to a negative outlook for the company's stock performance.