Disclosure: Long common stock, initial position started February 11 and accumulating.

Why the new position? Building a huge moat with a broad offering leveraging 1st party data with massive addressable market:

Market Leader - SimilarWeb plays in all the hottest sectors and arguably provides the most compelling aggregated datasets available. Within eCommerce, our firm uses both the Web and the Shopper suite to gauge where traffic comes from and the size of competitive brands. SimilarWeb collects data via extensions but also has strategic data sharing agreements with major players like Amazon.

2. Peak to Trough Drop - SimilarWeb announced weak guidance saying they are further investing into AI enabled offerings. The earnings also missed expectations which resulted in a 47% peak to trough drop in calendar year 2024. With the size of the addressable market and the compelling datasets SimilarWeb provides, I believe this drop has resulted in a compelling value.

3. Acquisition Target - With SimilarWeb’s market cap of ~$780mm on most recent trading, this could easily be a tuck-in acquisition for some of the larger players. SimilarWeb’s access to 1st party data is a clear differentiator for a major agency group or analytics firm.

Bottom line: Catching this falling knife is one worth taking a shot on. This could trade down into the $8’s but worthy of starting to accumulate at this point.