The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Semrush (NYSE: SEMR) and the rest of the sales and marketing software stocks fared in Q1.
The Internet and the exploding amount of data have transformed how businesses interact with, market to, and transact with their customers. Personalization of offerings, e-commerce, targeted advertising and data-empowered sales teams are now table stakes for modern businesses, and sales and marketing software providers are becoming the tools of evolving customer interaction.
The 23 sales and marketing software stocks we track reported a satisfactory Q1. As a group, revenues beat analysts’ consensus estimates by 2.5% while next quarter’s revenue guidance was in line.
In light of this news, share prices of the companies have held steady as they are up 3.8% on average since the latest earnings results.
Semrush (NYSE: SEMR)
Started by Oleg Shchegolev while still in university, Semrush (NYSE: SEMR) is a software-as-a-service platform that helps companies optimize their search engine and content marketing efforts.
Semrush reported revenues of $105 million, up 22.4% year on year. This print exceeded analysts’ expectations by 0.9%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ billings estimates.
Unsurprisingly, the stock is down 11% since reporting and currently trades at $9.05.
We think Semrush is a good business, but is it a buy today? Read our full report here, it’s free.
Best Q1: Yext (NYSE: YEXT)
Founded in 2006 by Howard Lerman, Yext (NYSE: YEXT) offers software as a service that helps their clients manage and monitor their online listings and customer reviews across all relevant databases, from Google Maps to Alexa or Siri.
Yext reported revenues of $109.5 million, up 14.1% year on year, outperforming analysts’ expectations by 1.8%. The business had an exceptional quarter with a solid beat of analysts’ annual recurring revenue estimates and an impressive beat of analysts’ billings estimates.
The market seems happy with the results as the stock is up 27.9% since reporting. It currently trades at $8.71.
Is now the time to buy Yext? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: Braze (NASDAQ: BRZE)
Founded in 2011 after the co-founders met at NYC Disrupt Hackathon, Braze (NASDAQ: BRZE) is a customer engagement software platform that allows brands to connect with customers through data-driven and contextual marketing campaigns.
Braze reported revenues of $162.1 million, up 19.6% year on year, exceeding analysts’ expectations by 2.2%. Still, it was a slower quarter as it posted full-year EPS guidance missing analysts’ expectations significantly and EPS guidance for next quarter missing analysts’ expectations significantly.
As expected, the stock is down 22.1% since the results and currently trades at $28.16.
Read our full analysis of Braze’s results here.
Zeta (NYSE: ZETA)
Co-founded by former Apple CEO John Sculley, Zeta Global (NYSE: ZETA) provides software and data analytics tools that help companies market their products to billions of customers.
Zeta reported revenues of $264.4 million, up 35.6% year on year. This result beat analysts’ expectations by 4.1%. Overall, it was a strong quarter as it also recorded a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ billings estimates.
The stock is up 15.7% since reporting and currently trades at $15.67.
Read our full, actionable report on Zeta here, it’s free.
Sprout Social (NASDAQ: SPT)
Founded by Justyn Howard and Aaron Rankin in 2010, Sprout Social (NASDAQ: SPT) provides a software as a service platform that companies can use to schedule and respond to posts on major social media networks like Twitter, Facebook, Instagram, Youtube and LinkedIn.
Sprout Social reported revenues of $109.3 million, up 12.9% year on year. This print surpassed analysts’ expectations by 1.5%. It was a strong quarter as it also put up EPS guidance for next quarter exceeding analysts’ expectations and a solid beat of analysts’ EBITDA estimates.
The company added 54 enterprise customers paying more than $10,000 annually to reach a total of 9,381. The stock is flat since reporting and currently trades at $21.95.
Read our full, actionable report on Sprout Social here, it’s free.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
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