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On Friday, Needham analysts maintained a Buy rating and a $50.00 price target on Braze Inc (NASDAQ:BRZE), following a report of strong quarterly results. The company, known for its customer engagement platform, added the highest number of new customers in six quarters and demonstrated quarter-over-quarter Customer Revenue Performance Obligations (cRPO) growth that halted a two-year slow deceleration. According to InvestingPro data, 16 analysts have revised their earnings upward for the upcoming period, with price targets ranging from $39 to $75, reflecting strong market confidence. The company has demonstrated robust revenue growth of 28.3% over the last twelve months.
The analysts highlighted Braze’s quarterly performance as its best in over a year, signaling a positive shift in momentum. Despite the overall success, the acquisition of OfferFit for $325 million was the focal point of discussions. OfferFit, a company specializing in AI-powered marketing personalization, is expected to enhance Braze’s product offerings and provide a competitive edge against more traditional marketing software. InvestingPro analysis shows Braze maintains strong financial health with a current ratio of 1.99 and more cash than debt on its balance sheet, positioning it well for this strategic acquisition.
The acquisition’s valuation of approximately 23 times revenue was noted by the analysts, who anticipate that the market will closely monitor the deal to ensure it yields the expected benefits in bookings. The transaction is seen as a strategic move to integrate advanced AI functionality into Braze’s services, which could lead to more personalized marketing strategies for their clients.
Looking ahead, Braze is projected to reach profitability by FY26. However, the Needham analysts indicated that the market’s attention would be on the company’s ability to accelerate revenue growth in the second half of the year. This focus on short-term performance underscores the importance of Braze’s immediate actions and strategies in the wake of their recent acquisition and current market expectations. InvestingPro forecasts suggest the company could turn profitable this year, with analysts projecting positive earnings per share. For deeper insights into Braze’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Braze Inc. reported strong fourth-quarter earnings for fiscal year 2025, surpassing analyst expectations with earnings per share (EPS) of $0.12, compared to a projected loss of $0.05. The company’s revenue reached $160.4 million, exceeding the expected $155.7 million, marking a 22% year-over-year growth. Following this, Citizens JMP analysts maintained a Market Outperform rating with a $68 price target, while Stifel analysts raised their price target to $50, citing Braze’s impressive fourth-quarter results and optimistic fiscal year 2026 outlook. Raymond (NSE:RYMD) James also increased its price target for Braze to $48, emphasizing the company’s positive performance indicators such as increased customer additions and a strong net revenue retention rate.
Braze’s strategic acquisition of OfferFit, a platform specializing in AI-based A/B testing, for $325 million was noted by Stifel and Raymond James as a move that could accelerate product development and enhance Braze’s market offerings. The acquisition is expected to contribute approximately 2% to Braze’s revenue growth. Furthermore, Braze provided guidance for fiscal year 2026, anticipating revenue between $686 million and $691 million, representing a 16% increase year-over-year. The company’s non-GAAP operating income is projected to be between $25.5 million and $29.5 million, exceeding previous consensus estimates.
JPMorgan maintained its Overweight rating on Braze with a $47 price target, highlighting the company’s strong end-of-year performance and continued innovation. Braze’s calculated remaining performance obligations (cRPO) grew by 23% year-over-year, and the company experienced a significant increase in new logo additions. Despite a slight decrease in the dollar-based net retention rate, Braze expects revenue growth to precede improvements in this metric. These recent developments reflect Braze’s strategic positioning and growth trajectory, as the company continues to focus on expanding its product offerings and enhancing its leadership in the market.
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