Last Update 10 Jan 26

SEMR: Adobe Cash Offer Will Set Trading Range With Limited Upside Potential

Analysts now anchor their price expectations for Semrush at about US$12.00 per share, aligning with the announced Adobe takeout price. This reflects a view that the agreed cash offer sets the reference point for value while leaving limited room for upside unless a higher bid emerges.

Analyst Commentary

Recent research moves have largely been about resetting ratings and targets around the agreed US$12.00 per share cash offer from Adobe, rather than updating long term fundamentals. You can think of it as analysts shifting from a growth story to a deal outcome story.

Bullish Takeaways

Bullish analysts highlight that the US$12.00 per share offer provides a clear, all cash valuation floor in the near term, which reduces uncertainty around where the stock might trade on fundamentals alone.
Some see the reference to a potentially competitive sale process as a sign that multiple parties may have looked at Semrush. They view this as a form of external validation of the business at around the agreed price.
The view that the takeout valuation is relatively low, combined with the comment that an over the top bid is not out of the question, keeps a small optionality angle alive for investors who stay in the stock.
Earlier, a US$8.00 price target from one major bank, now sitting below the US$12.00 deal price, suggests that the current offer already embeds a premium versus at least one prior fundamental target.

Bearish Takeaways

Bearish analysts have moved ratings to neutral stances such as Hold or Sector Weight. This signals that they see limited additional upside from here if the US$12.00 deal closes as announced.
Assumptions that the sale process was competitive, combined with the expectation that a higher bid is unlikely, frame the current offer as a practical ceiling on near term valuation.
With the stock now trading as a deal proxy, some analysts see less reason to focus on execution or growth upside. This can cap enthusiasm compared with when coverage centered on operational performance.
The prior US$8.00 target also underscores that certain analysts were already cautious on the standalone risk and reward profile. They may view the current situation as largely price discovery being settled by the acquirer rather than by future growth.

What's in the News

Adobe agreed to acquire Semrush Holdings for approximately US$2b in cash, offering US$12 per share. The deal was unanimously approved by both companies' boards and is subject to shareholder and regulatory approvals, including antitrust review (Key Developments).
Prior to the formal deal announcement, reports indicated Adobe was close to acquiring Semrush in a roughly US$1.9b transaction at US$12 per share, compared with Semrush's previous close at US$6.76 (Wall Street Journal, Periodicals).
Semrush scheduled a special or extraordinary shareholders meeting for February 3, 2026, which is expected to be a key step for investors to vote on the Adobe transaction (Key Developments).
Semrush launched its official app in ChatGPT, allowing authenticated customers to pull live Semrush data, automate reporting, and build AI driven workflows inside ChatGPT using OpenAI Agent Builder, with access available across multiple Semrush subscription tiers (Key Developments).
Semrush introduced Semrush One, a subscription offering that combines its SEO data with AI visibility tools across search engines and large language models. It is available in three tiers starting October 29, 2025, with introductory pricing from US$165 per month for new customers billed annually (Key Developments).

Valuation Changes

Fair Value: Fair value per share remains aligned with the Adobe offer at US$12.00, so there is no change in the reference price level used.
Discount Rate: The discount rate is essentially unchanged at about 8.45%, with only a very small numerical adjustment from 8.463358% to 8.445829024311488%.
Revenue Growth: Assumed revenue growth stays steady at roughly 14.46%, moving only fractionally from 14.456395% to 14.456394989136223%.
Net Profit Margin: Net profit margin assumptions remain effectively the same at about 9.88%, with a very minor shift from 9.877767% to 9.877766553834293%.
Future P/E: The future P/E is broadly flat at around 37.4x, with a small numerical change from 37.385536x to 37.36741301457253x.

Strong focus on AI-powered enterprise solutions and product expansion positions the company for long-term growth and improved margins.
Low enterprise penetration and shifting away from low-value segments create significant opportunity for sustained revenue and customer retention gains.
A shift to enterprise clients, evolving search trends, and rising competition threaten Semrush's revenue growth, margins, and resilience amid exposure to currency risks and market commoditization.

Catalysts

About Semrush Holdings

Develops an online visibility management software-as-a-service platform in the United States, the United Kingdom, and internationally.What are the underlying business or industry changes driving this perspective?

The accelerating adoption of AI-powered search and Large Language Model (LLM) interfaces is creating a new layer of complexity for digital marketing and online visibility, driving increased demand for advanced analytics and optimization tools like Semrush's AI products-positioning the company to capture higher-value enterprise clients and supporting long-term revenue growth.
The substantial growth in enterprise accounts (average ARR per enterprise customer up 15% YoY, number of $50K+ customers up 83% YoY) and low current penetration of Semrush's enterprise offerings (fewer than 5% of 9,000 enterprise accounts on enterprise SEO solution) highlight a significant untapped market, serving as a catalyst for sustained top-line expansion.
Ongoing cross-selling and expansion of Semrush's product suite into adjacent areas, including AI toolkits and content optimization, continues to boost average revenue per user and improves net revenue retention, benefiting both revenue and margin structure over time.
The company's deliberate pivot away from low-value, high-churn customer segments toward upmarket enterprise and AI-driven solutions is expected to improve customer retention, margin expansion (enterprise products have better unit economics), and free cash flow visibility.
With global digital marketing budgets growing and businesses continuing to prioritize omnichannel visibility and data-driven decision-making, Semrush's international footprint and AI/enterprise focus position it for durable revenue growth and eventual margin leverage despite current FX headwinds and near-term SMB softness.

Semrush Holdings Earnings and Revenue Growth

Semrush Holdings Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Semrush Holdings's revenue will grow by 16.2% annually over the next 3 years.
Analysts assume that profit margins will increase from -0.3% today to 12.4% in 3 years time.
Analysts expect earnings to reach $80.8 million (and earnings per share of $0.33) by about September 2028, up from $-1.3 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 26.3x on those 2028 earnings, up from -898.7x today. This future PE is lower than the current PE for the US Software industry at 36.2x.
Analysts expect the number of shares outstanding to grow by 1.37% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.42%, as per the Simply Wall St company report.

Semrush Holdings Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The ongoing shift away from lower-end customers, such as freelancers and very small businesses, driven by high churn, decreasing marketing ROI, and rising customer acquisition costs, exposes Semrush to concentrated customer risk-if enterprise segment growth slows, overall revenue growth could materially decelerate.
The secular trend toward "AI mode" and "zero-click" search results (where fewer blue links appear and more answers are generated directly by search engines) may fundamentally diminish the value and volume of traditional SEO, eroding long-term demand for Semrush's core offerings, which would impact future revenue.
Greater dependence on large enterprise customers increases vulnerability to longer sales cycles, larger deal volatility, and heightened competition, putting upward pressure on customer acquisition and support costs, which could negatively affect net margins and earnings consistency.
The company's cost structure is exposed to significant foreign exchange risk (e.g., expenses denominated in euros with revenue in USD), meaning currency fluctuations-unless effectively hedged-can compress operating margins and reduce earnings, as seen in the recent guidance cut prompted by a weaker U.S. dollar.
Market commoditization driven by the proliferation of lower-cost or freemium SEO/SEM tools and competitors, especially as enterprises seek comprehensive end-to-end marketing platforms, may eventually drive down pricing power, increase churn, and create persistent margin pressure for Semrush, undermining long-term earnings growth.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $10.833 for Semrush Holdings based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $13.0, and the most bearish reporting a price target of just $9.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $649.1 million, earnings will come to $80.8 million, and it would be trading on a PE ratio of 26.3x, assuming you use a discount rate of 8.4%.
Given the current share price of $7.73, the analyst price target of $10.83 is 28.6% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

AI-powered Search And LLM Interfaces Will Unlock Enterprise Potential