SEMrush Analyst Sees Ample Upside Despite Macro Headwinds Hindering Q4 Revenue

Needham analyst Scott Berg reiterated a Buy on SEMrush Holdings, Inc SEMR with a $20 price target.
SEMrush reported much better than expected 3Q22 financial results as strong sales execution bested incremental macro headwinds.
The 3Q22 ARR growth and customer count were all within typical Q3 seasonality patterns.
However, management guided 4Q22 revenue below the consensus estimate as some new headwinds are lengthening the sales cycles for more significant enterprise renewals and extensions.
He views the new guidance as appropriately risk-adjusted, given uncertain Q4 close rates.
The company has made significant progress in relocating its operations, and he expects this to be fully reflected in 4Q22 expenses.
Lastly, he was intrigued with the company's new App Center, a product strategy he had seen other software vendors utilize effectively to drive incremental revenue over time.
Price Action: SEMR shares traded lower by 4.90% at $9.52 on the last check Wednesday.

Momentum22.57

Growth1.28

Quality-

Value9.73

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Medium

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