Similarweb stock price has soared and has a 21% upside

Similarweb’s stock price performed well in 2024 as the company’s business gained momentum. SMWB rose by over 170%, bringing its valuation to over $1.2 billion. It outperformed most companies and key indices like the S&P 500 and Nasdaq 100. So, is Similarweb a good company to buy in 2025?

Similarweb’s business is performing well

Similarweb is a leading company using the Software as a Service (SaaS) model. The firm collects data from millions of websites and mobile applications and then offers to clients using a freemium model. 

Similarweb’s platform is used by companies of all types. Firms use this solution to get more data on their traffic and that of their competitors. Website design and search engine optimization (SEO) companies use its service to analyze keywords and competitor analysis. Some of its biggest customers are firms like Google, Walmart, Adidas, Novartis, and Sony.

While Similarweb’s service is essential, the company operates in a highly competitive environment. Its most important competitor is Google, which offers clients free website analytics data. Google also competes with companies like Amazon’s Alexa, Semrush, and Moz. 

Similarweb’s revenue has grown well in the past few years, moving from $70.6 million in 2019 to over $241 million in the trailing twelve months (TTM). Most importantly, the company is on a path toward profitability, narrowing its net loss from $83.7 million in 2022 to $9.4 million in TTM. 

The company’s growth has continued to accelerate in the past few months. Recent results showed that its quarterly revenue rose by 18% to $65 million as the number of customers using its platform increased. It was the fourth consecutive quarter of accelerating sales.

One benefit of Similarweb’s business is that it generates substantial revenue from multi-year contracts, which helps it avoid churn. 45% of its business is on multi-year contracts, a trend that has continued in the past few years. 

The company has benefited from the ongoing artificial intelligence opportunity. It is embedding AI into its service offerings, helping brands navigate the change of user behavior, providing more data for LLM training, and streamlining its business operations using the technology. 

SMWB boosted its guidance

Similarweb’s business has seen higher margins in the past few years. It had an operating margin of negative 46% in Q4’20, which turned into positive 7% in the last quarter. It now expects that its margin growth will continue growing as it reduces its R&D, S&M, and G&A portion of its revenue narrows. 

Similarweb boosted its forward guidance in the last financial results. It expects its fourth-quarter revenue to be between $64.7 million and $65.7 million, representing a 15% YoY growth rate. 

According to Yahoo Finance, analysts expect that Similarweb’s annual revenue will be $250 million. They also see its 2025 revenue growing to $285 million in the same range.

Similarweb’s annual earnings per share are expected to move from 18 cents to 27 cents in the next financial year.

Similarweb stock price analysis

Similarweb stock chart by TradingView

The weekly chart shows that the SMWB stock price made a strong bullish breakout in November after it published strong financial results. It has moved above the important resistance level at $9.76, its highest swing in March and October this year. It invalidated the double-top pattern at $9.76, a popular reversal sign.

The stock has moved above the 50-week moving average, and is slowly approaching the 50% Fibonacci Retracement level. The Average True Range (ATR) indicator has continued rising, indicating strong momentum.

Therefore, the stock will likely continue soaring as bulls target the 61.8% retracement point at $17.45, about 22% above the current level.

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