What we think about Semrush Holdings (SEMR)
Semrush Holdings in Three Words: Democratized Marketing Tools
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Background
As a marketing tool, the internet can represent a wondrous opportunity for companies both big and small to reach prospective customers. But it’s also a crowded place, where consumers are increasingly overwhelmed with information during the more than six hours per day (on average) they spend online. It’s become clear that as information overload intensifies, more enterprises need to find ways to be seen by customers — to break through the information noise.
Semrush is enviably positioned to help enterprises do just that. Shares of the fast-growing small-cap stock have come full circle since its March 2021 IPO — nearly tripling in its first six months as a public company, then pulling back hard as the broader market punished small-cap growth stocks and it voluntarily chose to wind down its Russia operations following the country’s invasion of Ukraine.
Today, Semrush is doing its best to help its enterprise client base navigate not only through the information overload inherent to doing business online, but also through more recent concerns of macroeconomic strife causing consumers to tighten their purse strings. Third-quarter revenue increased 20% to $79 million, while its dollar-based retention of 112% shows its 106,800 paying customers are slowly but surely finding value in its platform.
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