SEMrush Stock To $8?

SEMrush (SEMR) stock has jumped 74% during the past day, and is currently trading at $11.76. Our multi-factor assessment suggests that it may be time to sell SEMR stock. We have, overall, a pessimistic view of the stock, and a price of $8 may not be out of reach. We believe there are only a couple of things to fear in SEMR stock given its overall Moderate operating performance and financial condition. But keeping in mind its Very High valuation, we think that the stock is Unattractive.

Below is our assessment:

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Let’s get into details of each of the assessed factors but before that, for quick background: With $1.7 Bil in market cap, SEMrush provides an online visibility management SaaS platform that helps companies identify and reach the right audience for their content through optimal channels worldwide.

[1] Valuation Looks Very High

This table highlights how SEMR is valued vs broader market. For more details see: SEMR Valuation Ratios

[2] Growth Is Very Strong

• SEMrush has seen its top line grow at an average rate of 23.0% over the last 3 years
• Its revenues have grown 22% from $339 Mil to $414 Mil in the last 12 months
• Also, its quarterly revenues grew 19.7% to $109 Mil in the most recent quarter from $91 Mil a year ago.

This table highlights how SEMR is growing vs broader market. For more details see: SEMR Revenue Comparison

[3] Profitability Appears Very Weak

• SEMR last 12 month operating income was $-1.0 Mil representing operating margin of -0.2%
• With cash flow margin of 10.4%, it generated nearly $43 Mil in operating cash flow over this period
• For the same period, SEMR generated nearly $-1.3 Mil in net income, suggesting net margin of about -0.3%

This table highlights how SEMR profitability vs broader market. For more details see: SEMR Operating Income Comparison

[4] Financial Stability Looks Very Strong

• SEMR Debt was $13 Mil at the end of the most recent quarter, while its current Market Cap is $1.7 Bil. This implies Debt-to-Equity Ratio of 0.7%
• SEMR Cash (including cash equivalents) makes up $259 Mil of $425 Mil in total Assets. This yields a Cash-to-Assets Ratio of 60.8%

[5] Downturn Resilience Is Very Weak

SEMR has fared much worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• SEMR stock fell 76.9% from a high of $31.32 on 10 September 2021 to $7.24 on 27 December 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• The stock is yet to recover to its pre-Crisis high
• The highest the stock has reached since then is $18.37 on 10 February 2025 , and currently trades at $11.76

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read SEMR Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

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