Similarweb stock price target raised to $14 by Oppenheimer on strong AI demand

Investing.com - Oppenheimer raised its price target on Similarweb Ltd (NYSE:SMWB) to $14.00 from $13.00 on Monday, while maintaining an Outperform rating following the company’s second-quarter results that exceeded expectations. Currently trading at $8.46, the stock sits below the consensus analyst target range of $10-17. According to InvestingPro data, SMWB has shown impressive momentum with a 23% gain in the past week.

The research firm cited stronger demand for generative AI and large language model (LLM) training data, which represents 8% of Similarweb’s revenue, along with increased interest in AI agents and improvements to the company’s App Intelligence product. The company maintains impressive gross profit margins of 78.5%, according to InvestingPro analysis, which offers 8 additional key insights about SMWB’s financial health and growth potential.

Similarweb reported billings growth of 26% year-over-year in the second quarter, a significant improvement from the 2% growth in the first quarter. Remaining performance obligations (RPO) also increased 26% year-over-year, compared to 18% in the previous quarter, indicating a substantial demand pipeline. This growth complements the company’s overall revenue expansion of 16% over the last twelve months.

The number of salespeople booking deals rose 50% year-over-year in the second quarter, suggesting the company’s sales force restructuring is yielding positive results. Large-customer count, defined as those with annual recurring revenue exceeding $100,000, grew 13% compared to 9% in the first quarter.

Oppenheimer increased its fiscal year 2025 and 2026 billings estimates by 2%, while maintaining revenue and gross profit forecasts largely unchanged, with fiscal year 2026 revenue expected to grow 17% year-over-year.

In other recent news, Similarweb Ltd. reported second-quarter earnings that exceeded expectations, with adjusted earnings per share reaching $0.07, surpassing the analyst consensus estimate of $0.00. The company’s revenue for the quarter was $71 million, beating the consensus estimate of $68.84 million and marking a 17% increase from $60.6 million in the same quarter last year. This strong performance was partly driven by growth in AI-related business, with Gen AI and LLM training-related revenues contributing nearly 8% of the quarterly revenue. Following these results, Goldman Sachs reiterated its Buy rating and maintained a $10.00 price target on Similarweb. Similarly, JMP Securities reiterated its Market Outperform rating with a $17.00 price target. These recent developments highlight the positive momentum for Similarweb, especially in its AI sector.

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