Goldman Sachs analyst Adam Hotchkiss initiated coverage on Similarweb Ltd. with a 'Buy' rating and set a price target of $16. This initiation signals a positive outlook from a prominent financial institution regarding the company's future prospects.
Hotchkiss highlighted that Similarweb's recent go-to-market initiatives, including 'Similarweb 3.0', are expected to drive sustainable mid-to-high teens growth. These initiatives are also anticipated to lead to improving margins, contributing to potential share price outperformance over the next 12 months.
The analyst noted that while Similarweb's valuation at 4.5 times is a discount to some software peers, it is justified by the company's sub-scale profitability profile and higher-churn customer model. However, recent revenue acceleration and improving profitability are seen as positive catalysts.
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