SEMrush (SEMR) Q1 Earnings Report Preview: What To Look For

Kayode Omotosho /
2023/05/08 4:00 am EDT

Marketing analytics software Semrush (NYSE:SEMR) will be reporting results today afternoon. Here's what investors should know.

Last quarter SEMrush reported revenues of $68.8 million, up 28% year on year, beating analyst revenue expectations by 1.79%. It was a weaker quarter for the company, with underwhelming guidance for the next year and decelerating customer growth. The company added 1,000 customers to a total of 95,000.

Is SEMrush buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting SEMrush's revenue to grow 23.2% year on year to $70.4 million, slowing down from the 42.8% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.05 per share.

SEMrush Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 3.78%.

Looking at SEMrush's peers in the sales and marketing software segment, some of them have already reported Q1 earnings results, giving us a hint what we can expect. Zeta delivered top-line growth of 24.8% year on year, beating analyst estimates by 4.89% and HubSpot reported revenues up 26.8% year on year, exceeding estimates by 5.62%. Zeta traded down 1.96% on the results, HubSpot was up 4.96%. Read our full analysis of Zeta's results here and HubSpot's results here.

The technology sell-off has been putting pressure on stocks since November 2021, and while some of the software stocks have fared somewhat better, they have not been spared, with share price declining 6.62% over the last month. SEMrush is down 5.89% during the same time, and is heading into the earnings with analyst price target of $11.3, compared to share price of $9.58.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.