Procore signs multi-year strategic collaboration agreement with AWS
On Thursday, Oppenheimer analysts, led by Brian Schwartz, maintained their Outperform rating on Braze Inc (NASDAQ:BRZE) with a steady price target of $51.00, representing significant upside from the current price of $36.32. The stock has shown strong momentum with a 9.7% gain over the past week. Schwartz highlighted expectations of modest outperformance in the company’s fourth-quarter fiscal year 2025 results, albeit with potential risks associated with initial fiscal year 2026 revenue growth guidance.
Braze, a customer engagement platform, may face challenges due to a dip in the operating environment for customer engagement companies in 2025, as indicated by softer consumer data and increased macroeconomic volatility. These factors are anticipated to limit the company’s revenue guidance, though InvestingPro data shows the company maintains strong liquidity with a healthy current ratio of 1.99 and more cash than debt on its balance sheet.
Despite these concerns, Oppenheimer’s analysis suggests the possibility of conservative revenue guidance for the upcoming fiscal year. However, the firm believes that Braze’s operating margin guidance has the potential to surpass Wall Street expectations. Investor expectations are currently perceived as low, with the company’s stock trading at discount multiples.
Schwartz pointed out that positive margin growth over the forward twelve months (FTM) could pave the way for Braze to expand its investor base. This could be particularly likely if the company manages to sustain a high-teens to 20% growth trajectory in its top-line revenue. The reaffirmation of the Outperform rating reflects Oppenheimer’s confidence in Braze’s potential to outperform despite the noted headwinds.
In other recent news, Braze Inc has been actively engaged in several developments that could impact its future performance. The company is set to release its fourth-quarter earnings report, with analysts from JMP Securities maintaining a Market Outperform rating and a price target of $68.00. They anticipate record revenue and bookings, despite a slight decrease in the expected revenue growth rate to 19%. Raymond (NSE:RYMD) James also reiterated an Outperform rating, although they adjusted the price target from $48 to $45, citing reduced growth projections for fiscal years 2026 and 2027.
Additionally, Braze announced a strategic partnership with Shopify (NYSE:SHOP) to enhance e-commerce engagement, aiming to provide real-time insights and personalized shopping experiences. This collaboration is expected to offer new tools and features to Shopify customers in early 2025. The introduction of free trials and a credits-based packaging system by Braze is seen as a move to improve customer acquisition and retention. Despite the positive strategic developments, Raymond James noted potential short-term disruptions due to recent management changes. Investors and analysts are closely watching Braze’s upcoming earnings report for insights into its growth trajectory and financial health.
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