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On Friday, TD Cowen maintained a Buy rating on Braze Inc (NASDAQ:BRZE) and raised the price target to $47.00 from the previous $45.00. The upward revision follows Braze’s fourth-quarter results, which showcased a 22.5% revenue growth, marking a slight improvement over the previous quarter’s performance. According to InvestingPro data, the company has maintained strong momentum with a 28.31% revenue growth over the last twelve months, while achieving an impressive 68.64% gross profit margin. The company’s revenue guidance for the fiscal year 2026 aligned with Wall Street expectations, as did the operating margin projections.
The acquisition of OfferFit, a company specializing in AI agent technology, is seen as a strategic move that enhances Braze’s Agentic AI roadmap. The analyst noted that new customer acquisition for Braze reached its highest level since the second quarter of 2024, supported by diminishing churn levels. InvestingPro analysis reveals that Braze holds more cash than debt on its balance sheet, with a healthy current ratio of 1.99, indicating strong financial flexibility for strategic initiatives. Despite recent concerns over the departure of the Chief Customer Officer, Braze’s shares experienced a roughly 10% increase in after-hours trading, buoyed by the stable earnings beat and guidance that met expectations.
Braze’s valuation, at approximately 4.5 times the enterprise value to calendar year 2026 estimated sales (EV/CY26E Sales) after-hours, is considered to be near trough levels. Based on InvestingPro Fair Value analysis, the stock appears to be trading near its fair value. The analyst believes that the OfferFit acquisition is a positive development for Braze’s long-term growth strategy and its partnership with Shopify (NYSE:SHOP). The company is recognized for its solid long-term growth positioning and its ability to continue capturing market share from legacy providers and specialized vendors. With a market capitalization of $3.8 billion and 16 analysts revising their earnings upward for the upcoming period, Braze shows promising momentum.
The analyst’s commentary highlights Braze’s consistent performance and strategic initiatives, which are expected to support the company’s growth trajectory. With a new price target set at $47, which reflects around 5.5 times EV/CY26E Sales, TD Cowen reaffirms its confidence in Braze’s potential for continued success in the enterprise software market. Discover more insights about Braze and access its comprehensive Pro Research Report, along with detailed analysis of 1,400+ other US stocks, exclusively on InvestingPro.
In other recent news, Braze Inc has reported significant financial achievements and strategic moves. The company’s fourth-quarter results showed a 22% year-over-year revenue increase, adding 85 new clients, and a 23% growth in committed remaining performance obligations. Analysts from UBS and Stifel have maintained a Buy rating on Braze, with price targets of $51 and $50, respectively, following these strong earnings. Braze’s management has projected a 16% revenue growth for fiscal year 2026, supported by a robust net revenue retention rate of approximately 109% in the fourth quarter.
Additionally, Braze announced its acquisition of OfferFit, an AI decision and personalization platform, for $325 million. This acquisition is viewed as a strategic fit by firms like DA Davidson and Needham, who expect it to enhance Braze’s product offerings and provide substantial cross-selling opportunities. Analysts from Oppenheimer have also maintained an Outperform rating with a $51 price target, acknowledging the acquisition as the largest M&A deal in the company’s history. Despite some concerns about potential risks associated with the acquisition, analysts remain optimistic about Braze’s growth prospects.
The company’s strategic focus on expanding AI capabilities and maintaining steady guidance amidst macroeconomic uncertainties has been positively received by the market. Braze’s recent developments, including its financial performance and the OfferFit acquisition, have reinforced analysts’ confidence in the company’s trajectory. As the market continues to assess these updates, investors will closely watch how these factors influence Braze’s competitive position.
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