Shares of marketing analytics software Semrush (NYSE:SEMR) fell 5.16% in the morning session after analyst Adam Hotchkiss of Goldman Sachs initiated coverage on the stock with a Neutral rating and a price target of $10.5. Hotchkiss cautioned that Semrush faces an "existential risk" from bigger competitors who could challenge its data advantage. On the other hand, the analyst highlighted Semrush's ability to collect and use large data sets and tools to help businesses manage their online presence, especially in the small and medium-sized markets. He added that the potential demand for Semrush's software from the emerging technologies like generative AI (artificial intelligence) could be large.
What is the market telling us:
SEMrush's shares are very volatile and over the last year have had 35 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
SEMrush is up 20.5% since the beginning of the year, but at $9.80 per share it is still trading 32.1% below its 52-week high of $14.43 from August 2022. Investors who bought $1,000 worth of SEMrush's shares at the IPO in March 2021 would now be looking at an investment worth $873.95.
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