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On Friday, Oppenheimer analysts maintained an Outperform rating for Braze Inc (NASDAQ:BRZE) with a steady price target of $51.00. The firm’s analysts highlighted Braze’s strong performance at the end of FY25, noting that the fourth-quarter results surpassed consensus estimates. Braze’s management has set a revenue growth target of 16% for FY26, aligning with or slightly surpassing market expectations. The company demonstrates solid financial health with a current ratio of 1.99 and more cash than debt on its balance sheet, according to InvestingPro data.
The company has also announced its intention to acquire OfferFit, an AI decision and personalization platform, for $325 million. This marks the largest M&A deal in the company’s history. While the acquisition presents new opportunities, it also introduces potential risks, including the challenge of achieving financial synergies and the timing of their realization.
Despite some negative aspects, such as a decelerating business and the net revenue retention (NRR) rate not yet stabilizing, Oppenheimer’s analysts remain optimistic. They believe that Braze’s management team is performing well amidst a challenging environment for customer engagement suppliers. The analysts also consider the company’s valuation multiples to be reasonable, viewing Braze as a sustainable growth company with a narrative of increasing margins. With a market capitalization of $3.86 billion and trading at 8.29 times book value, detailed valuation analysis is available in the comprehensive Pro Research Report on InvestingPro, along with additional financial metrics and expert insights.
In their commentary, the analysts stated, "Braze’s business had a good finish to FY25 with F4Q:25 results mostly above consensus estimates. For FY26, management initiated 16% revenue growth guidance and this target is in line to slightly above Street expectations." They also addressed the upcoming acquisition, saying, "Additionally, the company announced its largest company M&A deal with plans to buy OfferFit, an AI decision and personalization platform for $325M."
The analysts expressed caution about the risks involved with the acquisition, noting, "Negatively, the business continues to decel, NRR has yet to find a bottom, and the execution and timing for achieving the financial synergies with OfferFit are a new risk to the story." Despite these concerns, their final assessment was positive: "Bottom Line: In our view, management is executing well in a tough operating market for customer engagement suppliers and BRZE multiples appear reasonable for a durable grower with a margin growth story. Reiterate Outperform rating, $51 PT." The company maintains a healthy Altman Z-Score of 5.64, indicating strong financial stability according to InvestingPro analysis.
In other recent news, Braze Inc has reported strong financial results for the fourth quarter of fiscal year 2025, surpassing expectations with non-GAAP earnings per share of $0.12, against an anticipated 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. Additionally, subscription revenue contributed $153.9 million to the total, also up 22% from the previous year. Analysts from Needham, JPMorgan, Stifel, and Raymond (NSE:RYMD) James have responded positively, maintaining or raising their price targets for Braze, citing the company’s strong performance and strategic moves.
The acquisition of OfferFit for $325 million is seen as a strategic enhancement to Braze’s AI capabilities, expected to bolster its product offerings. Analysts from Stifel and Raymond James noted that this acquisition could expedite Braze’s product development and contribute to its growth. Braze’s guidance for fiscal year 2026 is more optimistic than consensus estimates, projecting non-GAAP EPS of $0.31 to $0.35 and operating income between $25.5 million and $29.5 million on revenue of $686.0 million to $691.0 million.
JPMorgan highlighted Braze’s strong end-of-year performance, with revenue surpassing consensus by 3% and pro forma operating margins exceeding expectations. The company’s calculated remaining performance obligations (cRPO) grew by 23% year-over-year, indicating stable demand trends. Analysts remain optimistic about Braze’s growth trajectory and its ability to navigate the current market environment, with a focus on expanding its major verticals and enhancing its leadership position.
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