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Similarweb - AI Stock Analysis

Analysis generated May 21, 2024

Similarweb is a market intelligence company that provides insights into websites, applications, and digital industries. The company is known for its data analytics tool that helps businesses understand competitive dynamics and market behaviors. Similarweb caters to a diverse clientele ranging from small enterprises to large corporations, providing them with the data they need to drive digital growth and innovation.

Fundamental Analysis

Similarweb's revenue for the last quarter was $59M, marking a sequential increase of 3.92% and a year-over-year growth of 11.81%. These numbers highlight the company’s ability to generate consistent growth despite market fluctuations. On the profit front, the net income stood at $2.7M for the last quarter, showing a significant 19.81% increase from the previous quarter and an impressive 76.91% increase year-over-year. This suggests a strong upward trend in profitability.

However, it's important to note that the EBITDA for the last quarter was $160,000, which represents a sequential decrease of 111.04%. While this might raise concerns regarding operational efficiency, it still indicates an annual growth of 98.44% compared to the same quarter last year. The decline in EBITDA needs to be investigated further to understand whether it’s a result of increased operational costs or other factors.

Technical Analysis

Similarweb is currently trading at $8.08, showing a 4.26% increase from the previous month and a substantial 39.07% increase from the same time last year. This indicates that the stock is in a bullish trend. The current Simple Moving Average (SMA10) is 7.67, slightly higher than the previous SMA10 of 7.57, pointing to a potential upward trend in price movement.

However, the Relative Strength Index (RSI) stands at 77.5, signaling that the stock might be overbought, which could indicate a bearish signal. Investors should keep an eye on this metric, as a prolonged overbought condition might lead to a price correction.

Alternative Data Analysis

When analyzing alternative data, Similarweb has 117 open positions, up by 26% in the last few months. This indicates a potential expansion and growth phase for the company, which is generally a healthy sign. Employee sentiment at Similarweb remains neutral, suggesting a stable but cautiously optimistic workforce environment.

Customer acquisition data reveals that the company's webpage saw an estimated 21M visitors recently, but this number is down by 15% over the last couple of months, which is worrisome. Reduced web traffic could indicate a decline in customer interest or engagement.

Regarding customer engagement, Similarweb’s Instagram followers grew by 141% in the last few months, reflecting increased interest. Their Twitter account has 41,000 followers, with no significant changes. Lastly, the AltIndex AI score for Similarweb is 53, which suggests a hold signal based on a blend of fundamental, technical, and alternative data.

Conclusion and Recommendation

Based on the data analyzed, Similarweb has shown positive growth in revenue and net income year over year and month over month, indicating its strong business model. However, the decline in EBITDA and the potentially overbought condition indicated by the RSI are aspects that cannot be ignored. The rise in job postings suggests future growth, but the decrease in website traffic is concerning and needs to be closely monitored.

Given the mixed signals—though leaning more positively—Similarweb appears to be a stock with growth potential but also some risks. Investors might consider holding their current positions and observe how the company addresses the EBITDA decline and the drop in web traffic before making further investments. As per AltIndex's AI analysis, the hold signal seems to be the most prudent action at this time.

Disclaimer: This AI stock analysis, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current.