Similarweb stock jumps 19% as Goldman Sachs reiterates Buy rating

Published 14/08/2025, 11:36
© Rotem Cnaani, SimilarWeb PR

Investing.com - Goldman Sachs has reiterated its Buy rating and $10.00 price target on Similarweb Ltd (NYSE:SMWB) following the company’s second-quarter earnings report that exceeded expectations. According to InvestingPro data, analyst targets range from $10 to $17, with the stock currently trading at $8.43, suggesting potential upside.

Similarweb shares traded approximately 19% higher after reporting revenue and profitability ahead of Goldman Sachs estimates and consensus for Q2 2025, driven by Gen AI and LLM training-related revenues, which accounted for nearly 8% of quarterly revenue. The company maintains impressive gross profit margins of 78.46%, though it’s currently not profitable on a trailing twelve-month basis.

The company’s Return on Purchase Order (RPO) and current RPO accelerated sequentially to +26% and +15% respectively, compared to +18% and +9% in the first quarter. The quarter also included approximately $1 million in one-time fees from customers evaluating Similarweb’s data for Gen AI and LLM training.

Net Revenue Retention (NRR) for large customers with over $100,000 in Annual Recurring Revenue declined sequentially to 108% from 111% in Q1, while overall business NRR declined to 100% from 101% in the previous quarter.

Management raised its full-year profitability outlook to reflect the quarterly beat and expects to generate positive free cash flow throughout the year, while maintaining its full-year revenue guidance despite issuing below-consensus guidance for the third quarter. InvestingPro analysis shows the company maintains a FAIR financial health score, with revenue growing at 16.06% over the last twelve months. Get deeper insights and access to 8 additional ProTips with an InvestingPro subscription.

In other recent news, Similarweb Ltd. reported second-quarter earnings for 2025 that exceeded analyst expectations, with adjusted earnings per share reaching $0.07, surpassing the consensus estimate of $0.00. The company also reported a revenue of $71 million, which was higher than the anticipated $68.84 million, marking a 17% increase from the previous year’s $60.6 million for the same period. This growth was partly attributed to the company’s expanding activities in the AI sector, where revenues from Gen AI and LLM training made up nearly 8% of the total for the quarter. Following these results, JMP Securities reiterated its Market Outperform rating for Similarweb, maintaining a price target of $17.00. Despite a year-to-date stock decline of 50% prior to the earnings announcement, JMP’s reaffirmation reflects confidence in the company’s performance and outlook. These developments highlight the company’s strong revenue growth and positive momentum in its AI-related business.

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