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On Tuesday, Barclays (LON:BARC) analyst Raimo Lenschow reaffirmed an Overweight rating on Similarweb Ltd (NYSE:SMWB) with a steady price target of $15.00. Currently trading at $9.37, the stock sits well below the consensus analyst target range of $13-$20. According to InvestingPro data, the stock has recently entered oversold territory, though it’s down over 33% year-to-date. This decision follows Similarweb’s announcement of a price hike for its key Web Intelligence Business product. Lenschow highlighted that the company has increased the price of its Web Intelligence Business plan by 17%, and its Sales Intelligence Business plan by 14%. He noted the importance of the Web Intelligence product as a primary offering in Similarweb’s portfolio, with the Sales Intelligence likely being secondary.
The analyst pointed out that the pricing for the Starter and Individual tiers would remain the same. Additionally, Similarweb also raised the pricing on monthly data credits, which customers use to extract data from the platform. Lenschow’s analysis indicates that these changes will have a gradual effect due to the structure of Similarweb’s contracts. The company maintains impressive gross profit margins of 78% and has demonstrated solid revenue growth of 14.6% over the last twelve months, according to InvestingPro data.
According to the analyst, 49% of Similarweb’s Annual Recurring Revenue (ARR) is tied to multi-year contracts. Since existing customers will only encounter the new pricing upon renewal and considering that almost all of Similarweb’s ARR is based on annual contracts, the impact of the price increase is expected to unfold over time rather than immediately.
The reaffirmation of the Overweight rating suggests Barclays’ continued confidence in Similarweb’s stock performance, despite the changes in pricing. The $15.00 price target indicates the potential for the stock to reach that value, based on Barclays’ assessment of the company’s prospects.
Investors in Similarweb’s stock will be watching closely to see how the market responds to the price adjustments in the company’s product offerings. The gradual impact anticipated by Barclays could mean that any potential effects on the stock’s value and the company’s revenue growth will be observed over the coming months as contracts renew. For deeper insights into Similarweb’s valuation and growth metrics, InvestingPro subscribers can access the comprehensive Pro Research Report, which includes detailed analysis of the company’s financial health, valuation metrics, and growth prospects among 1,400+ top stocks.
In other recent news, Similarweb Ltd. reported its fourth-quarter earnings, which missed analyst expectations, contributing to a decline in investor confidence. The company posted adjusted earnings per share of $0.03, falling short of the $0.04 consensus estimate. However, revenue for the quarter was $65.6 million, slightly surpassing the expected $65.48 million and showing a 16% increase compared to the previous year. For the first quarter of 2025, Similarweb provided guidance that forecasts revenue between $66 million and $66.5 million, which is below the analyst consensus of $67.321 million. Additionally, the company anticipates a non-GAAP operating loss ranging from $1 million to $1.5 million for the quarter.
Despite these challenges, Similarweb’s full-year guidance for 2025 aligns with the analyst consensus, projecting revenue between $285 million and $288 million. This represents approximately 15% growth at the midpoint. The company highlighted a 17% year-over-year increase in its customer base, reaching 5,534 customers, and an 11% increase in customers with annual recurring revenue of $100,000 or more, totaling 405. While the full-year results showed positive growth, the focus remained on the weaker outlook for the upcoming quarter.
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