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Investing.com - Cantor Fitzgerald lowered its price target on Braze Inc (NASDAQ:BRZE) to $35.00 from $45.00 on Friday, while maintaining an Overweight rating on the customer engagement platform provider. According to InvestingPro data, Braze currently trades at $27.40, with analysts maintaining a strong buy consensus and a median price target suggesting 61% upside potential.
The price target reduction comes as Braze shares have declined 24% since reporting first-quarter fiscal 2026 results on June 5, compared to a 4% gain in the iShares Expanded Tech-Software Sector ETF (IGV) during the same period. InvestingPro data shows the stock has fallen nearly 26% over the past six months, while maintaining strong fundamentals with a current ratio of 1.92 and more cash than debt on its balance sheet.
Cantor Fitzgerald attributed the stock’s weakness to Braze’s fiscal 2026 guidance, which didn’t raise more than the quarterly beat, and a weaker-than-expected profitability outlook, which failed to counter bearish narratives about potential AI disruption to the company’s business model.
The new $35 price target assumes a multiple of 4 times Cantor’s fiscal 2027 revenue estimate, down from 5 times previously, placing Braze below the software-as-a-service (SaaS) group average of 5x-5.5x despite Braze’s stronger projected top-line growth of 17% versus the group’s 12-14%.
Braze shares are currently trading at approximately 3 times Cantor’s fiscal 2027 revenue estimate, which the firm believes represents a relatively low bar for second-quarter results.
In other recent news, Braze Inc. reported its fiscal first-quarter results, which exceeded consensus estimates, marking a 20% year-over-year increase in top-line growth. Despite this, several analyst firms have adjusted their price targets for the company. Citi reduced its target to $50, maintaining a Buy rating, while TD Cowen lowered its target to $43, citing revenue concerns, but also retained a Buy rating. Loop Capital cut its price target significantly from $75 to $45, yet highlighted Braze’s consistent performance and maintained a Buy rating. Stephens analysts reduced their target to $41, noting a deceleration in subscription revenue, but still emphasized Braze’s growth resilience. Oppenheimer also lowered its target to $44 due to revenue quality concerns, while maintaining an Outperform rating. Braze has raised its fiscal year 2026 revenue guidance and is integrating OfferFit, which is expected to impact margins temporarily but offers technology enhancement opportunities. Additionally, the company appointed Ed McDonnell as its new chief revenue officer, aiming to strengthen its leadership team.
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