SEMrush Holdings
NYSE: SEMR
$12.00 ▲ +0.00  (+0.00%)
At close: Apr 27, 2026 · 4:00 PM UTC
Financial Ratios
Market Cap1.78 Bn
P/E-91.42
P/S4.02
Div. Yield0.00
Revenue Growth (1y) (Qtr)14.63
Add ratio to table…

About

SEMrush Holdings, Inc. is a leading online visibility management software-as-a-service platform that enables companies worldwide to identify and reach the right audience for their content through the appropriate channels. The company’s platform integrates data and artificial intelligence across interconnected hubs focused on generative engine optimization, search engine optimization, paid advertising, social media management, local marketing, brand marketing, and content…

Read more ↓
Sector: Technology Industry: Software - Application CIK: 0001831840

Investment Thesis

▲ Bull case
  • Semrush is poised to benefit from the pending acquisition by Adobe which is expected to close in the first half of 2026. The combination would give Semrush access to Adobe’s vast enterprise customer base and its creative cloud suite creating cross sell opportunities. Management has highlighted that the combined platform will offer a unified workflow for creative assets and visibility analytics a gap that many marketers still face. This strategic fit is not yet fully priced into the stock implying upside if the deal closes on schedule and integration proceeds smoothly.
  • The company’s brand transformation to a brand visibility platform aligns with the rapid rise of AI search which grew 527% year over year according to internal data. By positioning itself as the intelligence engine for SEO and Agentic Search Optimization Semrush is capturing a new total addressable market that extends beyond traditional keyword tools. Early signs of success include the AI Visibility Awards where Semrush customers won multiple categories and the launch of the official ChatGPT app which brings proprietary data directly into generative AI workflows. These initiatives suggest that Semrush can monetize AI driven discovery faster than peers and sustain higher growth rates even as traditional SEO spending normalizes.
  • Financial fundamentals show a healthy cash generation profile with free cash flow margin of 9.7% for the full year 2025 and a cash balance of 264,280,000 at year end. This liquidity provides a buffer to fund integration costs with Adobe and to invest in product development without needing external financing. Non GAAP operating margin remained stable at approximately 12% indicating that core profitability is intact despite GAAP losses driven by stock based compensation. The strong cash flow supports the possibility of future share buybacks or dividend initiatives once the Adobe transaction is settled.
  • Semrush’s user base exceeds 28,000,000 globally ranging from small businesses to Fortune 500 firms giving it a network effect that enhances data richness and product stickiness. The proprietary database now contains 27,000,000,000 keywords 43,000,000,000,000 backlinks and over 213,000,000 LLM prompts providing a moat that competitors would find costly to replicate. As marketers increase spending on AI visibility and brand orchestration Semrush’s deep data assets position it to command premium pricing and improve dollar based net revenue retention which has historically stayed above 100%. This structural advantage is likely to drive durable long term growth.
▼ Bear case
  • The pending Adobe acquisition introduces significant execution risk. Integration of two large SaaS platforms with different go to market motions could distract management and lead to higher than expected costs. If regulatory approvals are delayed beyond the first half of 2026 the company would continue to operate without the anticipated synergies while still incurring acquisition related expenses which already totaled 10,938,000 for the full year 2025. Failure to realize cost synergies or revenue cross sells could leave shareholders with a diluted earnings profile and limited upside.
  • Semrush’s GAAP results remain negative with a net loss of 18,957,000 for the full year 2025 and an operating loss of 22,812,000. The losses are largely driven by high stock based compensation which amounted to 52,625,000 in 2025 representing over 11% of revenue. While non GAAP metrics adjust for this expense the persistence of large equity based awards could continue to weigh on GAAP profitability and may deter more conservative investors. Any slowdown in user growth or ARR expansion could exacerbate the GAAP loss profile and pressure the stock price.
  • The digital marketing landscape is becoming increasingly crowded with new entrants offering AI powered visibility tools and established players such as Google Microsoft and Adobe itself enhancing their own suites. Semrush’s reliance on marketing spend makes it vulnerable to cyclical downturns; if corporations cut discretionary budgets due to macroeconomic headwinds demand for SEO and visibility platforms could decline. Moreover the predicted 25% drop in traditional search volume by 2026 per Gartner could undermine the core SEO business faster than the company can monetize AI search alternatives leading to a revenue growth slowdown. This shift could pressure the company to accelerate its AI product roadmap while facing increased pricing competition.
  • Valuation multiples appear rich relative to current earnings. With a market capitalization that exceeds several times its non GAAP operating income investors are paying a premium for anticipated growth that may not materialize if the Adobe deal falters or AI monetization lags. The company also carries a notable amount of goodwill at 60,123,000 and intangible assets at 40,735,000 which could become impaired if expected synergies are not realized. These balance sheet items add downside risk in a scenario where performance disappoints and write downs become necessary.

Peer Comparison

Companies in the Software - Application
S.No. Ticker Company Market CapP/EP/STotal Debt (Qtr)
1 SAP Sap Se 208.91 Bn20.224.867.05 Bn
2 YMM Full Truck Alliance Co. Ltd. 188.77 Bn322.09-0.00 Bn
3 SHOP Shopify Inc. 145.98 Bn109.5911.80-
4 UBER Uber Technologies, Inc 141.48 Bn16.322.6410.51 Bn
5 CRM Salesforce, Inc. 128.51 Bn16.953.0039.28 Bn
6 NOW ServiceNow, Inc. 98.38 Bn54.177.057.52 Bn
7 ADP Automatic Data Processing Inc 97.56 Bn22.454.523.98 Bn
8 SNOW Snowflake Inc. 91.55 Bn-76.6318.19-