Why Needham Backed Similarweb’s AI Ambitions Despite Ongoing Profitability Struggles

Core Viewpoint - Similarweb Ltd. is gaining renewed analyst interest due to its strong performance in the small-cap tech sector and its potential in the large language model data opportunity, which could lead to significant revenue growth over time [1][2]. Financial Performance - In Q3 2025, Similarweb reported earnings per share (EPS) of $0.05, surpassing the consensus estimate of $0.02, and generated revenue of $71.79 million, slightly below the expected $71.95 million [3]. - The company experienced a negative net margin of –11.2% and a negative return on equity of –78.25%, indicating ongoing challenges in achieving profitability despite beating top-line and per-share expectations [4]. Business Model and Market Position - Similarweb offers a cloud-based digital intelligence platform that aggregates and analyzes web and app traffic data from millions of sites and applications globally, providing insights for businesses, marketers, and analysts to track market trends and optimize digital strategies [5]. Analyst Sentiment - Needham & Company LLC has reiterated a "Buy" rating on Similarweb with a price target of $14.00, citing improved go-to-market execution and early signs of better customer retention as factors that may enhance revenue retention metrics heading into fiscal 2026 [2].