Semrush Holdings, Inc. (SEMR): A Bull Case Theory

We came crossed a bullish thesis connected Semrush Holdings, Inc. connected P14 Capital’s Substack. In this article, we volition summarize the bulls’ thesis connected SEMR. Semrush Holdings, Inc.'s stock was trading astatine $11.83 arsenic of November 28th. SEMR’s trailing P/E was 138.64 according to Yahoo Finance.

Semrush Holdings, Inc. develops an online visibility absorption software-as-a-service level successful the United States, the United Kingdom, and internationally. SEMR shares initially rallied pursuing its 3Q25 results, with gross of $112M (+15% Y/Y) mostly successful enactment with guidance and NGOI borderline of 12.6% exceeding expectations, though GAAP EPS missed astatine -$0.01.

The halfway thesis remains intact: the fading “SaaS is dead” narrative, AI arsenic a maturation tailwind, and an up-market displacement toward endeavor walk acceptable the signifier for aggregate expansion. Key positives see beardown nett caller ARR of $20M, with AI products contributing ~$10M, representing fractional of nett caller ARR.

Enterprise ARR grew +33% Y/Y, with ARPU expanding 17% to ~$4K, driven by ample accounts and under-penetrated opportunities, portion much than 10% of customers already usage AI tools layered atop SEO. The new Semrush One level integrates AI visibility with accepted SEO, strengthening SEMR’s merchandise portfolio and fueling adoption crossed lawsuit tiers. Retention remains solid, peculiarly successful endeavor and AI cohorts, with NRR rising to 125–150%. Cash procreation was strong, with $21.9M from operations and escaped currency travel of $17M, portion the equilibrium expanse remains robust astatine $275.7M.

Challenges see GAAP borderline unit from FX, integration, and information costs, elevated S&M spend, rising SBC, and insignificant churn astatine the debased end. Guidance for FY25 remains mostly unchanged, with expected gross maturation of ~18% Y/Y and FCF margins ~12%. Looking ahead, endeavor enlargement and AI cross-sell should thrust ARR growth, offsetting low-end contraction. At existent depressed valuations, SEMR offers compelling upside: a base-case EV/Sales of 3x FY26E gross implies $11.66/share (~72% upside), portion adjacent bear-case scenarios suggest constricted downside, highlighting strategical optionality and imaginable acquisition interest.

Previously we covered a bullish thesis connected Similarweb Ltd. (SMWB) by 1rabbitresearch successful November 2025, which highlighted the company’s enactment successful web analytics, unsocial information assets, and accelerating gross growth. The company's banal terms has depreciated astir by 8.63% since our coverage. The thesis inactive stands arsenic SMWB remains positioned successful integer insights. P14 Capital shares a akin presumption but emphasizes SEMR’s AI-driven endeavor growth.