SEMrush Holdings, Inc. (NYSE: SEMR)

Sector: Technology Industry: Software - Application CIK: 0001831840
Market Cap 5.37 Bn
P/B 18.53
P/E -1,189.00
P/S 12.52
ROIC (Qtr) -2.48
Div Yield % 0.00
Rev 1y % (Qtr) 15.05
Total Debt (Qtr) 13.94 Mn
Debt/Equity (Qtr) 0.05

About

SEMrush Holdings, Inc., often recognized by its ticker symbol SEMR, operates in the software-as-a-service (SaaS) industry, providing an online visibility management platform. This platform empowers businesses to optimize their digital marketing efforts by identifying and engaging the appropriate audience, in the right context, and through the most effective channels. The company's primary business activities revolve around offering a comprehensive, data-driven platform that harnesses proprietary technology and machine learning capabilities. These...

Read more

Price action

Investment thesis

Bull case

  • Strong operating cash flow of 56.62M provides robust 4.06x coverage of total debt 13.94M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 80.78M provide 14.79x coverage of short-term debt 5.46M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 353.28M provides 25.34x coverage of total debt 13.94M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 41.50M exceeds capital expenditure of 15.12M by 2.74x, indicating strong organic growth funding capability.
  • Short-term investments of 194.92M provide solid 1.70x coverage of other current liabilities 114.94M, indicating strong liquidity.

Bear case

  • Operating cash flow of 56.62M barely covers its investment activities of (19.30M), with a coverage ratio of -2.93, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (19.30M) provide weak support for R&D spending of 92.73M, which is -0.21x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 80.78M provide limited coverage of acquisition spending of (6.47M), which is -12.49x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 56.62M provides insufficient coverage of deferred revenue obligations of 84.06M, which is 0.67x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of 56.62M shows concerning coverage of stock compensation expenses of 43.66M, with a 1.30 ratio indicating potential earnings quality issues.

Peer comparison

Companies in the Software - Application
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SAP Sap Se 288.31 Bn 34.60 6.72 10.73 Bn
2 CRM Salesforce, Inc. 248.32 Bn 34.38 6.16 11.14 Bn
3 SHOP Shopify Inc. 212.27 Bn 119.19 19.85 1.12 Bn
4 INTU Intuit Inc. 180.73 Bn 43.89 9.30 6.78 Bn
5 UBER Uber Technologies, Inc 178.38 Bn 10.72 3.60 12.19 Bn
6 NOW ServiceNow, Inc. 146.98 Bn 84.91 11.60 2.40 Bn
7 ADBE Adobe Inc. 144.48 Bn 20.77 6.23 6.64 Bn
8 ADP Automatic Data Processing Inc 108.20 Bn 26.16 5.18 9.77 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 11.82 2.65
EV to Cash from Ops. EV/CFO 94.06 13.37
EV to Debt EV to Debt 381.93 57.69
EV to EBIT EV/EBIT 1,046.71 19.12
EV to EBITDA EV/EBITDA 505.81 15.00
EV to Free Cash Flow [EV/FCF] EV/FCF 128.34 14.69
EV to Market Cap EV to Market Cap 0.99 -92.28
EV to Revenue EV/Rev 12.42 4.60
Price to Book Value [P/B] P/B 18.53 4.26
Price to Earnings [P/E] P/E -1,189.00 -136.90
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -3.95
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 4.25
Dividend per Basic Share Div per Share (Qtr) 0.00 0.15
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 2.52
Interest Coverage Interest Coverage 0.00 -52.32
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -26.82 -259.78
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 79.18 9,763.58
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.61
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -138.37 -263.15
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -53.96 56.46
EBIT Growth (1y) % EBIT 1y % (Qtr) -79.49 -225.15
EBT Growth (1y) % EBT 1y % (Qtr) -79.49 -86.10
EPS Growth (1y) % EPS 1y % (Qtr) -112.50 123.84
FCF Growth (1y) % FCF 1y % (Qtr) 19.62 -36.82
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 16.62 95.08
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.95 0.58
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 0.57 3.75
Current Ratio Curr Ratio (Qtr) 2.29 8.16
Debt to Equity Ratio Debt/Equity (Qtr) 0.05 0.17
Interest Cover Ratio Interest Cover Ratio 0.00 -52.32
Times Interest Earned Times Interest Earned 0.00 -52.32
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 5.30 -100.06
EBIT Margin % EBIT Margin % (Qtr) 1.19 -164.24
EBT Margin % EBT Margin % (Qtr) 1.19 -116.94
Gross Margin % Gross Margin % (Qtr) 80.90 58.20
Net Profit Margin % Net Margin % (Qtr) -1.10 -121.65