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On Friday, TD Cowen analysts adjusted their outlook on Braze Inc (NASDAQ: NASDAQ:BRZE) by lowering the stock’s price target to $43 from a previous $47. Despite this change, the firm maintained its Buy rating on the stock. According to InvestingPro data, Braze maintains a strong financial position with more cash than debt and liquid assets exceeding short-term obligations. The decision follows Braze’s recent earnings report, which showed a softer revenue beat than anticipated.
The analysts noted that while Braze reported a softer-than-expected revenue performance, the company raised its organic fiscal year 2026 guidance. While currently showing a loss with an EBITDA of -$115 million, InvestingPro analysis indicates analysts expect profitability this fiscal year. The integration of OfferFit is expected to impact margins temporarily, though it provides an opportunity for technology enhancement and cross-selling.
Braze shares fell by approximately 10% in after-hours trading, affected by the softer revenue beat and continued pressure on net revenue retention (NRR). The analysts highlighted that the company’s valuation is nearing its lowest levels, trading at around 5 times its expected sales for calendar year 2026. The company maintains a healthy 69% gross profit margin and has demonstrated solid revenue growth of 23% in the last twelve months.
Despite the current challenges with NRR, the analysts expressed confidence in Braze’s long-term positioning within the enterprise marketing software-as-a-service sector. They foresee potential improvements in the latter part of 2025, which could alleviate some of the near-term pressures. For deeper insights into Braze’s financial health and growth prospects, including additional ProTips and comprehensive valuation metrics, visit InvestingPro.
In other recent news, Braze Inc. reported its fiscal first-quarter results, which exceeded consensus estimates, showcasing strong performance across various metrics. The company saw a 20% year-over-year increase in top-line growth and a 24.3% increase in committed recurring purchase orders, indicating robust bookings. Despite these positive results, analysts have expressed concerns about revenue quality and sequential deceleration in subscription revenue, leading to several firms adjusting their price targets. Loop Capital lowered its target to $45, while Stephens reduced it to $41, and Oppenheimer adjusted to $44, all maintaining positive ratings on the stock. Needham, however, maintained its $50 target, citing strong first-quarter performance and optimism about future business trends.
Braze’s recent acquisition of OfferFit contributed an $11 million boost to its fiscal year 2026 revenue guidance, although analysts noted potential risks in achieving financial synergies. The company’s management has been recognized for effectively navigating challenging market conditions, with strategic moves such as appointing Ed McDonnell as the new chief revenue officer. Raymond (NSE:RYMD) James also lowered its price target to $43 but maintained an Outperform rating, acknowledging potential headwinds from the OfferFit acquisition affecting margins. Despite these adjustments, analysts remain optimistic about Braze’s growth potential, supported by strategic acquisitions and platform technology enhancements.
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