Needham reiterates Buy rating on Braze stock, cites AI adoption momentum

Published 01/10/2025, 11:56
Needham reiterates Buy rating on Braze stock, cites AI adoption momentum

Investing.com - Needham maintained its Buy rating and $50.00 price target on Braze Inc (NASDAQ:BRZE), which aligns with the broader Wall Street sentiment. According to InvestingPro data, analyst targets range from $38 to $68, with 16 analysts recently revising their earnings estimates upward for the upcoming period.

The firm attended Braze’s Forge 2025 event in Las Vegas, which marked the company’s 10th annual customer conference and its largest to date with approximately 1,500 attendees. The $3.16 billion market cap company has shown strong momentum, maintaining 22% year-over-year revenue growth despite the recent 11.5% decline in share price over the past week.

Needham observed that marketers are embracing AI functionality, particularly Braze Decisioning Studio, which was developed from the recent OfferFit acquisition and was frequently mentioned by customers at the event.

While customers are still working through proof-of-concept stages with AI-based solutions, Needham believes AI spending budgets are forming and could see meaningful adoption in calendar year 2026.

The firm also noted new product announcements at the conference, including Agentic functionality and Snowflake CortexAI within Braze AI Operator, which enables expanded and faster utilization of customer data stored in Snowflake.

In other recent news, Braze Inc. reported revenue that exceeded analyst expectations by 5%, showcasing a 24% year-over-year growth and a 22% organic growth, as noted by Goldman Sachs. The company’s operating margin also surpassed FactSet estimates by approximately 300 basis points. Following these strong second-quarter results, several firms have reiterated their positive outlook on Braze. Stifel maintained its Buy rating with a $40.00 price target, while Goldman Sachs reiterated a Buy rating with a $52.00 price target. TD Cowen increased its price target from $38.00 to $40.00, highlighting Braze’s significant performance improvement over the last six quarters. Oppenheimer also reiterated an Outperform rating with a $38.00 price target, emphasizing the company’s strong fiscal second-quarter results. Meanwhile, UBS adjusted its price target to $43.00 from $48.00, maintaining a Buy rating and noting Braze’s ability to sustain organic revenue growth in the 20% range. These developments reflect a broad consensus among analysts on Braze’s positive financial trajectory.

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