How to Buy Similarweb (SMWB) Stock

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Contributor, Benzinga
December 16, 2021

These days, if you’re not on the internet, you’re not anywhere. With over 6 billion indexed web pages in existence today, unless you have some mechanism to emerge on top, you’re going to fade into the noise.

Fortunately, Similarweb helps companies avoid a date with obscurity. Using advanced web analytics, it provides critical information, especially regarding what the competition is up to. This ability to win the internet for its clients has brought much attention to Similarweb’s initial public offering (IPO) and subsequent stock trading

When Did Similarweb (SMWB) IPO?

Similarweb IPOed on May 12, 2021 under the ticker NYSE: SMWB.

Similarweb Financial History

One of the factors that separate Similarweb from other internet technology-related debuts is its financials. Rather than being a purely aspirational organization, Similarweb provides substance for early bird investors to chew on.

In 2020, the data analytics firm generated $93.5 million in revenue, up 32% from the $70.6 million posted in the prior year. Interestingly, the cost of revenue only increased 4.4% to $21.4 million, leading to a gross profit increase of nearly 44%.

To be fair, net loss expanded to just under $22 million last year, a notable rise from the loss of $17.7 million posted in 2019. However, investors should bear in mind that as of Dec. 31, 2020, Similarweb had 2,718 clients, which is up 11.5% from the same time in the year-ago level.

Further, the company will take the proceeds from the IPO and invest in its expanding global footprint. In addition to Similarweb’s presence in the U.S. and U.K., it has its sights set on France, Japan and Australia.

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Similarweb enjoyed strong support from the private equity realm, progressively raising higher amounts since its angel round on Feb. 1, 2009. In total, the analytics and market intelligence firm raised $235.2 million.

Similarweb Potential

According to Similarweb’s Form F-1 filing with the Securities and Exchange Commission, the digital research, marketing and sales intelligence and web analytics industry features a $34 billion addressable market. This figure isn’t out of the question since leveraging a strong web presence — and keeping ahead of the competition — is vital to success in this economy.

Indeed, Similarweb’s client list reads like a who’s who of the most preeminent digital brands, including Walmart (NYSE: WMT), Adobe (NASDAQ: ADBE), adidas (OTCMKTS: ADDYY) and Google (NASDAQ: GOOG, NASDAQ: GOOGL). Given current trends, it’s likely that the digital intelligence firm will only add to its impressive list.

Before the pandemic, businesses competed fiercely to rank No. 1e on Google. Obviously, getting ranked highly directs more eyeballs to your company and not on your competitors. Plus, evidence indicates that people exponentially lose interest beyond the first few search listings.

But following the pandemic, it’s probable that consumer behaviors will change—at least on a semi-permanent basis. For instance, online sales will be much more important than before, especially if another COVID-19 variant sweeps through the global economy. This makes the Similarweb debut incredibly pertinent to our times.

How to Buy Similarweb (SMWB) Stock

If you know how to buy stocks, it’s a straightforward process. If not, follow the simple steps below.

Step 1: Pick a brokerage.

Many years ago, picking a brokerage was a stressful affair because the variance in fees imposed huge consequences at scale. However, the proliferation of mobile investing apps forced the brokerage industry into a serious rethink. Today, most of the incentives for you to join, such as commission-free trading, are the same across the board.

This lets you focus on your needs and preferences. For instance, if you’re working a hectic schedule, you may find that a mobile trading app fits your lifestyle just fine. On the other hand, if you want to build your investing acumen, you should opt for a platform that can keep up.

Below is a list of best brokers to consider.

Step 2: Decide how many shares you want.

Your share count is extremely significant because it represents your risk-reward profile. Logically, the more shares you own, the more nominal gains you will accrue if your target stock moves higher. Conversely, the opposite is true — more shares expose you to greater risk. Therefore, only invest the most shares on your ideas for which you have the most evidence and conviction.

Step 3: Choose your order type.

Below is a list of order types to choose from and market concepts to understand before making your trade.

  • Bid: The bid is the highest price a buyer will offer for a stock. It is always lower than the ask.
  • Ask: On the other end, the ask is the lowest price that a seller will accept. It is always higher than the bid.
  • Spread: The spread is simply the difference between the bid and ask price. But it’s also a de facto indicator of market liquidity and risk. Narrower spreads indicate high liquidity and low risk because a buyer is usually available for the target stock. Wider spreads warn about low liquidity and high risk because a buyer may not be available to acquire the stock from you.
  • Limit order: Choose a limit order to buy stock at a specific price. You must be aware that there’s no guarantee that the target stock will reach your specified price.
  • Market order: To buy shares at the going rate, use a market order, which will fulfill at the next available price. Please be aware that you’ll get the least favorable terms: Buy orders execute on the ask, sell orders on the bid.
  • Stop-loss order: A stop-loss order is a protective mechanism that automatically exits you out of your holdings at either a predetermined price or the next available price, whichever comes first. The risk here is the gap-down session, where a fresh session can open well below your predetermined price.
  • Stop-limit order: Stop-limit orders only fulfill at the predetermined price, which eliminates some of the risk associated with a stop loss. But if shares continue to drop following a gap-down session, your stop-limit order will be left hanging unfulfilled.

Step 4: Execute your trade. 

To execute a market order, take these steps:

  1. Select action type (buy or sell).
  2. Enter the shares you want to acquire (or sell).
  3. Hit the Buy (or sell) button.

Follow the same steps above for limit orders, with the exception that you must enter your desired execution price.

Helping Clients Gain the Edge on the Internet

There’s an adage that states if you’re not first, you’re last. Frankly, it fits very well in the competitive world of web marketing and placement. Most of the time, consumers will not rifle through pages of search results to find what they’re looking for. If you’re not immediately upfront, you might as well be last.

This is the reason why Similarweb stock has attracted so many investors. By giving its clients the edge in internet traffic and web presence, Similarweb is rapidly becoming an indispensable platform.

About Joshua Enomoto

His distinct writing style of distilling convoluted data into relatable and compelling narratives has earned him recognition among several investment-related publications.