An Investors Look at SEMrush

Join Motley Fool contributor Brian Stoffel and Motley Fool analyst Emily Flippen as they dive into a recent IPO on today’s Wildcard Wednesday show.

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This video was recorded on Nov. 3, 2021.

Emily Flippen: Welcome to Industry Focus. Today is Wednesday, November 3rd, and I’m your host, Emily Flippen. Today, I am joined by The Fools’ Brian Stoffel, and we’re going to be talking about a newly public leader in search engine optimization and online marketing SEMrush (NYSE:SEMR). Thanks for joining, Brian.

Brian Stoffel: You’re welcome. Thanks for having me, Emily.

Emily Flippen: Yeah, it’s good to have you on. This is the second time here on Industry Focus, we had so much fun last month that we had to do it again.

Brian Stoffel: Yeah. I survived my first one. I was nervously waiting to see if there will be a call back.

Emily Flippen: [laughs] You did more than that. This is a really interesting business, one that you brought my attention when I pinged you and said, “You have any ideas for Industry Focus next week?” How did you find SEMrush?

Brian Stoffel: Brian Feroldi and I have a series that we do for Backstage Pass, and it’s called IPO Stocks from Scratch. We start off knowing almost nothing about a company and we take it through our frameworks and we do real-time making tons of mistakes and looking like idiots because I think that that actually helps. I think that’s a good thing because if we look like idiots then other people are OK looking like idiots when they’re getting started. Then all of a sudden, we demystify the process of investing stocks. We did this. When we did, we realized that this company’s scored very well, so well that Brian Feroldi started almost freaking out because the score was so high. So that was how we found out about it.

Emily Flippen: I have to say, I was a little bit of a skeptic myself. I did go back and listen to some of the commentary that you and Brian Feroldi made about SEMrush. But something about it just didn’t sit right with me and I couldn’t quite put my finger on it and being the complete pessimist that I am, I went and I did my best to rip apart whether it’s the management team or their financial picture here. While things aren’t perfect, I will say, I didn’t find any glaring red flags that will canary in the coal mine that I was looking for. It’s certainly an interesting business and it’s been a while since we’ve talked about a business that had been so excited about on Industry Focus, covering the consumer goods show on Tuesday a lot of time for we’re talking about companies that maybe aren’t performing at quite the level that SEMrush is.

Brian Stoffel: Yeah. But I think you did find some holes…