Yahoo Finance Semrush Holdings, Inc. (NYSE:SEMR) Just Reported, And Analysts Assigned A US$11.33 Price Target
There's been a notable change in appetite for Semrush Holdings, Inc. (NYSE:SEMR) shares in the week since its first-quarter report, with the stock down 13% to US$8.24. The statutory results were mixed overall, with revenues of US$71m in line with analyst forecasts, but losses of US$0.07 per share, some 9.4% larger than the analysts were predicting. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Semrush Holdings after the latest results.
See our latest analysis for Semrush Holdings
After the latest results, the seven analysts covering Semrush Holdings are now predicting revenues of US$307.1m in 2023. If met, this would reflect a notable 15% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 81% to US$0.054. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$307.1m and losses of US$0.054 per share in 2023.
The analysts trimmed their valuations, with the average price target falling 12% to US$11.33, with the ongoing losses seemingly weighing on sentiment, despite no real changes to the earnings forecasts. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Semrush Holdings at US$14.00 per share, while the most bearish prices it at US$9.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Semrush Holdings' revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 20% growth on an annualised basis. This is compared to a historical growth rate of 31% over the past year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 12% annually. Even after the forecast slowdown in growth, it seems obvious that Semrush Holdings is also expected to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Semrush Holdings going out to 2025, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 2 warning signs for Semrush Holdings that you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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