Semrush (SEMR) is climbing for a third straight day, rising 10% this afternoon. The company provides software that enhances businesses' online marketing efforts.

Morgan Stanley Upgraded SEMR to Overweight

On Monday, Morgan Stanley raised its rating on the shares to Overweight. The bank believes that Semrush is poised to continuously grow over the longer term, driven by its search engine optimization (SEO) and content marketing businesses.

A marketing manager examining a publisher's digital inventory on a laptop.

Among the upcoming, positive catalysts for SEMR stock are the improving condition of small businesses and the company's increasing ability to penetrate large companies, Morgan Stanley believes. Additionally, the bank thinks that the firm's margins can increase going forward, while its sales can rise at a 20%+ annual clip.

Finally, Morgan Stanley believes that analysts' estimates for the company are conservative, while the shares were undervalued heading into this week.

More Information About SEMR

Analysts, on average, predict that the company's sales will jump 21.5% in the first quarter versus the same period a year earlier to $104 million.

Six of the seven Street analysts who have written notes about the firm in the last 90 days have Strong Buy or Buy ratings on the name.

While we acknowledge the potential of SEMR, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SEMR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ ALSO  8 Best Wide Moat Stocks to Buy Now  and  30 Most Important AI Stocks According to BlackRock Disclosure: None. This article is originally published at Insider Monkey.