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On Monday, Macquarie analyst Ross Compton increased the price target on Braze Inc (NASDAQ:BRZE) to $40 from the previous $39, while keeping a neutral stance on the company’s shares. The revision follows Braze’s impressive performance, which saw the company surpassing top-line expectations by 3% and achieving its highest dollar beat in the past four quarters. The company’s revenue grew 26% year-over-year to $593 million, with a healthy gross profit margin of 69%.
Braze’s commitment to growth was evident as its calculated remaining performance obligations (cRPO) surged by 23%. The company’s future outlook appears promising as it provided guidance that exceeded expectations for FY26E. The company’s strategic moves, including a deeper integration with Shopify (NASDAQ:SHOP) and the acquisition of OfferFit, highlight its focus on expanding its e-commerce and artificial intelligence capabilities. According to InvestingPro, Braze maintains a strong financial position with more cash than debt on its balance sheet, and 11 analysts have recently revised their earnings estimates upward. Get access to 4 more exclusive ProTips and comprehensive analysis with InvestingPro.
Macquarie’s analyst noted Braze’s progress toward profitability, citing cost optimization efforts as a positive development. However, the firm is taking a cautious approach, preferring to see an improvement in Braze’s dollar-based net retention rate (DBNR) and sustained revenue growth before adopting a more bullish perspective.
The slight increase in the price target from $39 to $40 reflects the analyst’s recognition of Braze’s recent achievements and potential for future growth, balanced with a wait-and-see approach for further indicators of the company’s long-term performance.
In other recent news, Braze Inc has reported strong financial performance and strategic advancements. The company’s fiscal year 2025 results showed a robust Dollar-Based Net Retention Rate of 111%, surpassing expectations. For fiscal year 2026, Braze has projected an organic growth rate of 16%, excluding contributions from its recent acquisition of OfferFit, which is anticipated to add approximately two percentage points to growth. Analysts from Citi, TD Cowen, DA Davidson, UBS, and Stifel have maintained a Buy rating on Braze, with price targets ranging from $47 to $55, reflecting confidence in the company’s growth trajectory.
Braze’s acquisition of OfferFit, valued at $325 million, is seen as a strategic move to enhance its AI capabilities and expand its product offerings. The company’s fourth-quarter earnings indicated a 22% year-over-year revenue increase, with the addition of 85 new customers. Despite concerns over macroeconomic conditions and the departure of its Chief Customer Officer, Braze’s guidance for fiscal year 2026 aligns with market expectations, with a forecasted 16% revenue growth and a 4% operating margin.
Analysts have noted Braze’s consistent performance and strategic initiatives, such as the OfferFit acquisition, as factors supporting its growth strategy. The company’s management remains optimistic, emphasizing the resilience of their guidance approach amidst economic uncertainties. Investors have responded positively to these developments, as reflected in the upward adjustments of the stock’s price targets by several analyst firms.
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