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

We came across a bullish thesis on Semrush Holdings, Inc. on P14 Capital’s Substack. In this article, we will summarize the bulls’ thesis on SEMR. Semrush Holdings, Inc.’s share was trading at $11.83 as of November 28th. SEMR’s trailing P/E was 138.64 according to Yahoo Finance.

Semrush Holdings, Inc. develops an online visibility management software-as-a-service platform in the United States, the United Kingdom, and internationally. SEMR shares initially rallied following its 3Q25 results, with revenue of $112M (+15% Y/Y) largely in line with guidance and NGOI margin of 12.6% exceeding expectations, though GAAP EPS missed at -$0.01.

The core thesis remains intact: the fading “SaaS is dead” narrative, AI as a growth tailwind, and an up-market shift toward enterprise spend set the stage for multiple expansion. Key positives include strong net new ARR of $20M, with AI products contributing ~$10M, representing half of net new ARR.

Enterprise ARR grew +33% Y/Y, with ARPU increasing 17% to ~$4K, driven by large accounts and under-penetrated opportunities, while more than 10% of customers already use AI tools layered atop SEO. The new Semrush One platform integrates AI visibility with traditional SEO, strengthening SEMR’s product portfolio and fueling adoption across customer tiers. Retention remains solid, particularly in enterprise and AI cohorts, with NRR rising to 125–150%. Cash generation was strong, with $21.9M from operations and free cash flow of $17M, while the balance sheet remains robust at $275.7M.

Challenges include GAAP margin pressure from FX, integration, and data costs, elevated S&M spend, rising SBC, and minor churn at the low end. Guidance for FY25 remains largely unchanged, with expected revenue growth of ~18% Y/Y and FCF margins ~12%. Looking ahead, enterprise expansion and AI cross-sell should drive ARR growth, offsetting low-end contraction. At current depressed valuations, SEMR offers compelling upside: a base-case EV/Sales of 3x FY26E revenue implies $11.66/share (~72% upside), while even bear-case scenarios suggest limited downside, highlighting strategic optionality and potential acquisition interest.

Previously we covered a bullish thesis on Similarweb Ltd. (SMWB) by 1rabbitresearch in November 2025, which highlighted the company’s leadership in web analytics, unique data assets, and accelerating revenue growth. The company’s stock price has depreciated approximately by 8.63% since our coverage. The thesis still stands as SMWB remains positioned in digital insights. P14 Capital shares a similar view but emphasizes SEMR’s AI-driven enterprise growth.

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Disclosure: None.