Critical Review: SEMrush (NYSE:SEMR) and Commerce.com (NASDAQ:CMRC)

SEMrush (NYSE:SEMR) and Commerce.com (NASDAQ:CMRC) are both small-cap services companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, profitability, institutional ownership, valuation, dividends, analyst recommendations and risk.

Valuation & Earnings

This table compares SEMrush and Commerce.com”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SEMrush	$443.64 million	4.07	-$18.96 million	($0.11)	-108.68
Commerce.com	$342.35 million	0.65	-$19.34 million	($0.23)	-11.83

SEMrush has higher revenue and earnings than Commerce.com. SEMrush is trading at a lower price-to-earnings ratio than Commerce.com, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

SEMrush has a beta of 1.5, suggesting that its share price is 50% more volatile than the S&P 500. Comparatively, Commerce.com has a beta of 1.16, suggesting that its share price is 16% more volatile than the S&P 500.

Institutional and Insider Ownership

32.9% of SEMrush shares are owned by institutional investors. Comparatively, 79.2% of Commerce.com shares are owned by institutional investors. 55.6% of SEMrush shares are owned by insiders. Comparatively, 9.1% of Commerce.com shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares SEMrush and Commerce.com’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SEMrush	-4.27%	-3.19%	-2.12%
Commerce.com	-5.65%	-8.33%	-1.10%

Analyst Recommendations

This is a breakdown of recent ratings for SEMrush and Commerce.com, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SEMrush	1	7	0	0	1.88
Commerce.com	3	2	2	0	1.86

SEMrush currently has a consensus target price of $10.80, indicating a potential downside of 9.66%. Commerce.com has a consensus target price of $5.58, indicating a potential upside of 105.27%. Given Commerce.com’s higher probable upside, analysts plainly believe Commerce.com is more favorable than SEMrush.

Summary

SEMrush beats Commerce.com on 9 of the 14 factors compared between the two stocks.

About SEMrush

Semrush Holdings, Inc. develops an online visibility management software-as-a-service platform worldwide. The company enables companies to identify and reach the right audience for their content through the right channels. Its platform enables the company’s customers to understand trends and act upon insights to enhance the online visibility, and drive traffic to their websites and social media pages, as well as online listings, distribute targeted content to their customers, and measure the digital marketing campaigns. The company was founded in 2008 and is headquartered in Boston, Massachusetts.

About Commerce.com

BigCommerce Holdings, Inc. operates a software-as-a-service platform for small businesses, mid-markets, and large enterprises in the United States, Europe, the Middle East, Africa, the Asia-Pacific, and internationally. The company’s platform provides various services for launching and scaling e-commerce operation, including store design, catalog management, hosting, checkout, order management, reporting, and pre-integrations. As of December 31, 2021, it served approximately 60,000 online stores across industries. BigCommerce Holdings, Inc. was founded in 2009 and is headquartered in Austin, Texas.