SEMrush Holdings Inc (SEMR, Financial) has recently caught the attention of investors with its notable stock performance. The company's market capitalization stands at $1.7 billion, with the current stock price at $11.86. Over the past week, SEMrush has experienced a 3.62% gain, and looking at the past three months, the stock has surged by an impressive 35.72%. According to GuruFocus's GF Value, the stock is currently modestly undervalued with a GF Value of $16.05, suggesting potential room for growth. This valuation is particularly noteworthy considering there was no applicable past GF Value to compare against.
Understanding SEMrush Holdings Inc
SEMrush operates within the competitive software industry, providing an online visibility management SaaS platform. The company's services are crucial for businesses looking to enhance their online presence through marketing analytics and digital campaign effectiveness. SEMrush's platform is designed to help subscribers improve their online visibility, drive website and social media traffic, and distribute content effectively. The company's reach is global, with significant revenue streams from the US, the UK, and other regions.
Profitability Analysis
Despite its growth, SEMrush's Profitability Rank is low at 1/10. The company's operating margin is currently at -7.67%, which is better than 33.48% of its industry peers. Its Return on Equity (ROE) stands at -9.86%, surpassing 33.09% of competitors, while Return on Assets (ROA) is at -6.68%, outperforming 34.25% of the industry. The Return on Invested Capital (ROIC) is -24.08%, which is still better than 21.08% of industry peers. These figures indicate that SEMrush is making strides in its profitability metrics, albeit there is still room for improvement.
Growth Trajectory
SEMrush's growth metrics present a mixed picture. The company's 3-Year Revenue Growth Rate per Share is an impressive 34.50%, which is better than 87.09% of its industry peers. However, the 3-Year EPS without NRI Growth Rate is at -33.20%, which, while not ideal, still outperforms 15.7% of industry peers. This suggests that while the company is growing its revenue significantly, it is still working on translating that growth into net earnings.
Investor Confidence
Notable investors have taken positions in SEMrush, indicating a level of confidence in the company's prospects. Jim Simons (Trades, Portfolio) holds 96,700 shares, representing a 0.07% share percentage. Paul Tudor Jones (Trades, Portfolio) follows with 89,966 shares, or a 0.06% share percentage. Steven Cohen (Trades, Portfolio) has a smaller stake of 2,000 shares. These holdings reflect a cautious but tangible interest from savvy market players.
Competitive Landscape
When compared to its competitors, SEMrush holds its own in terms of market capitalization. Kingsoft Cloud Holdings Ltd (KC, Financial) has a market cap of $937.898 million, Grindr Inc (GRND, Financial) is valued at $1.47 billion, and PDF Solutions Inc (PDFS, Financial) stands at $1.2 billion. SEMrush's market cap of $1.7 billion positions it as a significant player within its competitive set.
Conclusive Insights
In conclusion, SEMrush Holdings Inc's stock performance has been robust, with a 35.72% gain over the past three months and a current valuation that suggests the stock is modestly undervalued. The company's profitability metrics, while not at the top of the industry, show that it is better than a significant portion of its peers. Growth in revenue is strong, although this has not yet fully translated into earnings growth. The presence of notable investors and a market cap that competes well with its peers round out a picture of a company that is navigating its industry with potential for further growth and profitability.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
