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Investing.com - UBS lowered its price target on Braze Inc (NASDAQ:BRZE) to $43.00 from $48.00 while maintaining a Buy rating on the customer engagement platform. The company, currently valued at $3.07 billion, maintains a strong balance sheet with more cash than debt.
The firm cited evidence that Braze can maintain organic revenue growth in the 20% range, with current quarter growth accelerating to 22%, or 21% when excluding $1.5 million of harder-to-predict or one-time items. This aligns with the company’s impressive trailing twelve-month revenue growth of 22.16% and robust gross margin of 68.79%.
UBS noted several positive indicators including stabilizing in-period net revenue retention (NRR), strong current remaining performance obligations (cRPO), and continued growth in customers spending over $500,000.
The investment bank highlighted Braze’s improved earnings outlook, with the company raising its expected operating income by $17.5 million, which exceeded its revenue increase of $14.5 million and implies an operating margin of 3.5%.
At approximately 3 times estimated calendar year 2026 enterprise value to sales ratio before earnings, UBS believes Braze shares deserve a re-rating, noting it has become rare to find application companies with stable to improving revenue growth trajectories in the 20% range.
In other recent news, Braze Inc. reported strong financial results for the second quarter of fiscal year 2026. The company achieved an earnings per share of $0.15, significantly surpassing the forecasted $0.03, representing a 400% surprise. Revenue reached $180.1 million, exceeding projections by nearly 5%, with a 24% year-over-year growth, driven by broad-based demand and better-than-expected moderation in down-selling. In response to these robust results, Mizuho raised its price target for Braze to $45.00 from $40.00, maintaining an Outperform rating. These developments highlight a positive outlook for the company, as noted by Mizuho. Despite the strong earnings, Braze’s stock experienced a slight dip in aftermarket trading. The company’s performance continues to attract attention from investors and analysts alike.
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