Similarweb Ltd. (NYSE:SMWB) shares are trading higher on Friday. The stock reversed from decline in the last couple of days after the company reported worse-than-expected fourth-quarter sales results and several analysts downgraded it.
Earnings Snapshot
On Tuesday, the company reported earnings of three cents per share, which was in line with the consensus estimate.
The company reported sales of $72.758 million, which missed the analyst consensus estimate of $76.442 million.
As of December 31, 2025, the number of customers reached 6,128, up 11% year over year (Y/Y), and the number of customers with annual recurring revenue (ARR) of $100,000 or more grew 12% Y/Y to 454.
Remaining performance obligations (RPO) rose 17% Y/Y to $288.8 million as of December 31, 2025.
Similarweb sees FY26 sales of $305.000 million-$315.000 million vs $324.569 million analyst estimate and first-quarter sales of $72.000 million-$74.000 million vs street view of $77.812 million.
Below-Consensus Guidance & Revenue Miss Prompted Downgrade
Citizens analyst Patrick Walravens downgrades the company from Market Outperform to Market Perform.
The bearish stance reflects weak quarterly results and a worse-than-expected outlook.
The analyst cut the FY2026 adjusted EPS estimate to 18 cents from 22 cents (consensus 21 cents), and the FY27 adjusted EPS estimate to 24 cents from 44 cents (consensus 38 cents).
Also, Walravens introduced FY28 adjusted EPS estimate of $0.38 (consensus $0.70).
Needham analyst Scott Berg downgraded the company from Buy to Hold.
The analyst writes that the company’s results were impacted by ongoing sales execution challenges that have lengthened sales cycles for the second time this year.
Amid the transition from an SEO-driven model to Gen AI Search adoption, the analyst is adopting a cautious view on SMWB shares until business visibility stabilizes.
Further, Berg adds that uncertainty around the second half of FY26 revenue acceleration, and potential AI disruption suggests the stock may remain under pressure in the coming quarters.
Technical Analysis
Over the past year, Similarweb Ltd. has faced significant challenges, with its stock price declining by 71.80%. Currently, the stock is trading at $2.73, which is significantly below its 20-day SMA of $4.64 and even further below its 200-day SMA of $7.83, indicating a strong bearish trend. The stock is also trading 64% below its 200-day SMA, highlighting the severity of the downtrend.
The technical indicators provide a bleak outlook as well. The Relative Strength Index (RSI) is at 13.50, suggesting that the stock is in the oversold territory, which could indicate a potential for reversal or at least some level of buying interest at these lower levels. However, the Moving Average Convergence Divergence (MACD) shows a bearish pattern, with the MACD line at -0.8621 below the signal line at -0.7047, reinforcing the negative momentum.
Price Action: SMWB shares are up 10.12% at $2.83 at the last check on Friday.
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