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On Friday, Oppenheimer analysts adjusted their outlook for Braze Inc (NASDAQ: NASDAQ:BRZE), reducing the price target to $44 from a previous $51. The firm maintained its Outperform rating on the stock, despite concerns about revenue quality. According to InvestingPro data, Braze maintains strong financial health with a current ratio of 1.92 and holds more cash than debt on its balance sheet.
Braze’s recent fiscal first-quarter results exceeded consensus estimates. However, Oppenheimer noted that the magnitude and quality of the revenue beat were not as robust as desired. The company’s backlog metrics showed growth in the mid-twenty percentages, indicating strong bookings. The company achieved impressive revenue growth of 22.66% year-over-year, maintaining a healthy gross margin of 69.44%. While currently not profitable, InvestingPro analysis indicates analysts expect profitability this year.
Despite these positive indicators, Oppenheimer highlighted challenges such as a decelerating business and a net revenue retention rate below 10%, which has yet to stabilize. The firm also pointed to potential risks related to achieving financial synergies with OfferFit.
Oppenheimer acknowledged Braze’s management for effectively navigating a challenging market for customer engagement suppliers. The analysts noted that Braze’s valuation multiples appear reasonable for a company with durable subscription growth in the mid-to-high teens.
In other recent news, Braze Inc. has reported strong financial results for the first quarter of fiscal year 2026, surpassing analysts’ expectations. The company achieved an earnings per share of $0.07, compared to the forecasted $0.05, and revenue increased by nearly 20% year-over-year to $162.1 million. This performance was supported by growth in committed recurring purchase orders, although there was a slight decline in net revenue retention due to churn from zero interest rate policy customers. Braze’s recent acquisition of OfferFit is expected to contribute to revenue growth, with the company raising its full-year revenue guidance. Analyst firms have adjusted their outlooks accordingly; Needham maintains a Buy rating with a $50 target, while Raymond (NSE:RYMD) James and JPMorgan have lowered their price targets to $43 and $45, respectively, citing potential margin impacts from the OfferFit acquisition. Despite these adjustments, analysts remain optimistic about Braze’s potential for growth, highlighting its strategic acquisitions and strong customer metrics. Braze continues to focus on innovation and expanding its customer base, positioning itself as a key player in the customer engagement platform market.
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