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Braze (BRZE)
NASDAQ:BRZE

Braze (BRZE) AI Stock Analysis

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Braze

(NASDAQ:BRZE)

Rating:63Neutral
Price Target:
$32.00
▲(4.40%Upside)
Braze's overall stock score is primarily driven by robust growth and strategic positioning highlighted in the earnings call and recent corporate activities. However, the stock is currently undervalued due to ongoing profitability challenges and bearish technical indicators, which weigh down the score.
Positive Factors
Acquisition and Expansion
Braze closed its acquisition of OfferFit, adding AI decisioning capabilities and a new cross-sell opportunity.
Customer Growth
Total customer count expanded to 2,296, a net addition of 85 sequentially that was larger than last 4Q’s +33; management noted it was not due to any specific changes in incentive structures but was rather due to strength in core business performance.
Earnings Performance
Braze beat expectations nicely across all key metrics, with revenue growth above expectations.
Negative Factors
Pricing and Valuation
The price target for Braze, Inc. has been lowered from $47.00 to $43.00.
Revenue Concerns
The $1mm Q1 Q/Q subscription revenue increase was underwhelming and the lowest since the IPO.
Valuation Scrutiny
The Street is expected to scrutinize the ~23x revenue valuation multiple until it sees appropriate bookings benefits.

Braze (BRZE) vs. SPDR S&P 500 ETF (SPY)

Braze Business Overview & Revenue Model

Company DescriptionBraze (BRZE) is a leading customer engagement platform that specializes in creating personalized, multi-channel marketing experiences. The company operates within the technology and marketing sectors, offering a range of products and services designed to help businesses effectively engage with their customers. Braze's core offerings include tools for email, mobile, in-app messaging, and web push notifications, enabling brands to deliver relevant and timely messaging across various channels. The platform leverages real-time data and machine learning to optimize customer interactions and enhance loyalty.
How the Company Makes MoneyBraze generates revenue primarily through a subscription-based model. Businesses pay for access to Braze's comprehensive suite of customer engagement tools, which are priced based on the volume of users and the extent of services utilized. Key revenue streams include subscription fees for platform usage, and potentially additional fees for premium features or services such as advanced analytics and personalized support. Significant partnerships with other technology companies and marketing platforms enhance Braze's ecosystem, allowing integrations that can drive customer acquisition and retention. As a SaaS provider, Braze benefits from recurring revenue streams and opportunities for upselling as clients expand their use of the platform.

Braze Earnings Call Summary

Earnings Call Date:Jun 05, 2025
(Q1-2026)
|
% Change Since: -15.10%|
Next Earnings Date:Sep 04, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong financial performance with significant revenue growth, profitability, and customer expansion. The strategic acquisition of OfferFit is expected to enhance AI capabilities and contribute to revenue. However, challenges include elevated churn due to macroeconomic factors and regional growth issues in Southeast Asia. The OfferFit acquisition also impacts margins in the short term.
Q1-2026 Updates
Positive Updates
Strong Revenue Growth
Braze achieved $162.1 million in revenue, marking a nearly 20% year-over-year increase.
Profitability and Cash Flow
The company realized its fourth straight quarter of non-GAAP net income profitability with over $7 million in net income and nearly $23 million in free cash flow.
Customer Expansion
Customer count rose to 2,342, an increase of 46 sequentially and 240 year-over-year. Large customers with $500,000+ ARR grew 24% year-over-year.
Strategic Acquisition of OfferFit
Braze successfully closed the acquisition of OfferFit, enhancing its AI capabilities and expected to add approximately $11 million to $12 million in revenue for fiscal year 2026.
Expansion of Global Data Centers
New data centers were launched in Australia and Indonesia, supporting global expansion and data residency requirements.
Negative Updates
Seasonal Churn and Macro Environment
The company experienced elevated churn levels due to seasonal enterprise business renewals and a noisy macroeconomic environment.
Southeast Asia Growth Challenges
Comparative weakness in Southeast Asia, attributed to an uneven economic recovery in China, impacted growth in the region.
Impact of OfferFit Acquisition on Margins
The acquisition of OfferFit temporarily affects operating income margin, with a projected 300 basis point reduction from prior guidance.
Company Guidance
During the Braze fiscal first-quarter 2026 earnings call, the company provided robust guidance, showcasing its strong financial performance and strategic direction. Braze reported $162.1 million in revenue, marking a 20% year-over-year increase, with a notable improvement in non-GAAP operating margin by over 900 basis points. The company achieved a non-GAAP net income of over $7 million and nearly $23 million in free cash flow for the quarter. The customer base expanded, with total customers rising to 2,342, including a 24% increase in customers with $500,000-plus ARR, totaling 262. The dollar-based net retention rate was 109%, and the large customer segment's rate was 112%. Braze's total remaining performance obligation increased to $829.3 million, up 26% year-over-year. For fiscal 2026, Braze projects revenue between $702 million and $706 million, anticipating a 19% year-over-year growth at the midpoint. The acquisition of OfferFit, expected to contribute roughly $11 million to $12 million in revenue, is set to enhance Braze's AI capabilities and drive further growth.

Braze Financial Statement Overview

Summary
Braze shows strong revenue growth and a healthy cash position, but continues to face challenges with profitability due to negative net income and margins. Improvements in cash flow indicate better operational efficiency, though net losses pose risks to long-term financial stability.
Income Statement
68
Positive
Braze's revenue has shown a strong growth trajectory, increasing from $96.36 million in 2020 to $593.41 million in 2025, representing a substantial growth rate over the years. However, the company continues to operate at a loss with negative EBIT and net income, although there is a trend of decreasing losses. The gross profit margin remains healthy, indicating efficient cost management at the production level, but the net profit margin is negative due to significant operating expenses.
Balance Sheet
60
Neutral
The balance sheet reflects moderate financial stability with a strong cash position and increasing stockholders' equity, reaching $474.86 million in 2025. The debt-to-equity ratio is low, suggesting manageable leverage levels. However, the company has negative net income impacting the return on equity, which is negative, indicating inefficiency in generating returns from shareholders' equity. The equity ratio is strong, indicating a solid base of equity financing.
Cash Flow
65
Positive
Braze has improved its free cash flow position, turning positive in 2025 after negative figures in earlier years, indicating better cash management and operational efficiency. The operating cash flow has also improved significantly, suggesting better alignment between operating profits and cash generation. However, the free cash flow to net income ratio is not favorable due to continuing net losses, which poses a risk to sustainable cash flow generation.
Breakdown
Mar 2025Mar 2024Mar 2023Mar 2022Mar 2021
Income StatementTotal Revenue
593.41M471.80M355.43M238.03M150.19M
Gross Profit
410.22M324.27M239.61M159.52M95.68M
EBIT
-122.16M-144.69M-148.14M-78.21M-32.15M
EBITDA
-112.04M-137.73M-143.52M-75.56M-30.56M
Net Income Common Stockholders
-103.74M-129.17M-140.75M-78.17M-31.97M
Balance SheetCash, Cash Equivalents and Short-Term Investments
513.52M476.13M478.67M514.09M86.51M
Total Assets
871.00M810.94M705.41M666.26M171.39M
Total Debt
87.44M90.61M51.28M0.000.00
Net Debt
4.38M22.38M-17.30M-478.94M-28.51M
Total Liabilities
396.25M366.52M258.65M161.44M277.67M
Stockholders Equity
474.86M444.23M445.30M501.58M-108.51M
Cash FlowFree Cash Flow
23.45M-6.49M-39.01M-39.77M-10.43M
Operating Cash Flow
36.68M6.85M-22.31M-35.40M-6.08M
Investing Cash Flow
-36.47M-19.98M-398.52M18.04M22.47M
Financing Cash Flow
11.70M13.11M11.33M467.91M4.87M

Braze Technical Analysis

Technical Analysis Sentiment
Negative
Last Price30.65
Price Trends
50DMA
32.89
Negative
100DMA
36.30
Negative
200DMA
36.88
Negative
Market Momentum
MACD
-0.46
Positive
RSI
31.75
Neutral
STOCH
5.71
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BRZE, the sentiment is Negative. The current price of 30.65 is below the 20-day moving average (MA) of 35.10, below the 50-day MA of 32.89, and below the 200-day MA of 36.88, indicating a bearish trend. The MACD of -0.46 indicates Positive momentum. The RSI at 31.75 is Neutral, neither overbought nor oversold. The STOCH value of 5.71 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BRZE.

Braze Risk Analysis

Braze disclosed 61 risk factors in its most recent earnings report. Braze reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Braze Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
CXCXM
80
Outperform
$2.27B21.2017.50%6.75%97.06%
71
Outperform
$4.63B-6.85%20.46%39.37%
SPSPT
66
Neutral
$1.26B-36.95%17.79%16.49%
63
Neutral
$3.12B-22.82%22.66%21.20%
62
Neutral
$11.80B10.31-7.45%2.91%7.43%-7.78%
58
Neutral
$3.14B-3.84%4.82%73.90%
58
Neutral
$3.50B-83.36%9.84%13.74%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
BRZE
Braze
29.10
-7.13
-19.68%
SPT
Sprout Social
22.46
-12.43
-35.63%
ASAN
Asana
14.35
1.05
7.89%
GBTG
Global Business Travel Group
6.57
0.06
0.92%
CXM
Sprinklr
8.83
-0.11
-1.23%
FRSH
Freshworks
15.89
3.11
24.33%

Braze Corporate Events

Executive/Board ChangesM&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Braze Reports Q1 2026 Revenue Growth and Leadership Change
Positive
Jun 5, 2025

Braze announced its fiscal first quarter 2026 results, highlighting a 19.6% year-over-year revenue increase to $162.1 million, driven by new customers and renewals. The company also completed the acquisition of OfferFit, an AI decisioning company, and introduced new messaging channels to enhance customer journeys. Additionally, Braze appointed Ed McDonnell as Chief Revenue Officer to further strengthen its market position.

The most recent analyst rating on (BRZE) stock is a Buy with a $47.00 price target. To see the full list of analyst forecasts on Braze stock, see the BRZE Stock Forecast page.

M&A TransactionsBusiness Operations and Strategy
Braze Announces Acquisition of OfferFit for $325 Million
Positive
Mar 27, 2025

On March 27, 2025, Braze announced its intent to acquire OfferFit, a company specializing in AI decisioning technology, for $325 million. This acquisition is expected to enhance Braze’s capabilities in providing personalized customer journeys at scale. The announcement follows a strong fiscal year for Braze, which saw a 26% increase in revenue, driven by new customer acquisitions, upsells, and renewals. The acquisition is anticipated to further solidify Braze’s position in the customer engagement industry by integrating advanced AI technologies. The transaction is expected to close by the end of Braze’s fiscal quarter ending July 31, 2025, subject to customary closing conditions.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.