Piper Sandler maintained its Overweight rating on Braze Inc (NASDAQ:BRZE) with a steady price target of $51.00. The firm's positive stance comes after reviewing new information presented during the 2024 analyst day, which coincides with the start of the Forge user conference.
The leadership team's commitment to increasing operating leverage in the upcoming year and continuing to differentiate their product offerings has been highlighted as a key factor in the firm's reassurance.
Despite the challenges in pinpointing the exact timing of when Braze's top-line growth will hit its lowest point, Piper Sandler's outlook remains optimistic. Analysts at the firm believe that the 35% year-to-date decline in Braze's stock price primarily reflects investor concerns over growth. They suggest that the current sell-off presents an opportunity for patient investors to purchase shares at a lower price.
The analyst day event provided an opportunity for Braze to showcase its strategic plans and product roadmap to analysts and investors.
Piper Sandler's commentary indicates a belief in the company's potential to overcome current market concerns through strategic initiatives aimed at improving financial performance.
The $51 price target set by Piper Sandler implies a level of confidence in Braze's future performance, despite the stock's recent downward trend. The firm advises investors to consider the current weakness in the share price as a buying opportunity, reinforcing their Overweight rating on the stock.
In summary, Piper Sandler remains bullish on Braze Inc, emphasizing the company's focus on operational efficiency and product innovation as reasons to maintain the current stock rating and price target. The firm encourages long-term investors to remain engaged, anticipating a positive shift in the company's growth trajectory.
Braze Inc. reported a significant 26% increase in its fiscal second quarter 2025 revenue, reaching $145.5 million. The company also added 61 new customers, bringing the total to 2,163. For the third quarter, revenue is projected to be between $147.5 million and $148.5 million, with full fiscal year 2025 revenue expected to be between $582.5 million and $585.5 million.
Several analyst firms have recently adjusted their price targets for Braze. Loop Capital maintained a $75 target and Buy rating, citing potential growth in AI. Oppenheimer revised their target to $51 from $60, while maintaining an Outperform rating. Similarly, DA Davidson adjusted their target to $55 from $65, but retained a Buy rating. Another unnamed firm held steady with a Buy rating and a $70 price target. TD (TSX:TD) Cowen also reiterated a Buy rating, with a consistent price target of $52.
These adjustments followed Braze's investor event where the company's management provided detailed insights into the company's operations and future plans. Notably, they increased the higher end of their long-term gross margin target to 74%, representing a 200 basis point improvement.
However, concerns were raised regarding the company's near-term outlook. The management's guidance for a 110% net revenue retention (NRR) rate for the fourth quarter of fiscal year 2025 suggests potential volatility.
InvestingPro Insights
As Piper Sandler maintains a positive outlook on Braze Inc (NASDAQ:BRZE), InvestingPro data provides a deeper look into the company's financials. With a market capitalization of approximately $3.56 billion, Braze's growth narrative is supported by a robust revenue growth of 31.12% over the last twelve months as of Q2 2025. Despite not being profitable during this period, with a negative operating income margin of -25.71%, analysts have revised their earnings upwards for the upcoming period, signaling potential for a turnaround. Moreover, Braze's strategic financial positioning is evident as it holds more cash than debt on its balance sheet, which could provide resilience in the face of market fluctuations.
InvestingPro Tips highlight the company's liquid assets exceeding short-term obligations, which may reassure investors of Braze's capacity to meet its immediate financial commitments. Additionally, while the stock has fared poorly over the last month, with a price total return of -22.82%, and is trading near its 52-week low, analysts predict the company will be profitable this year. These insights could be particularly valuable for investors considering Piper Sandler's advice to view the current weakness as a buying opportunity.
For those seeking more detailed analysis, InvestingPro offers additional tips on Braze Inc, available through the platform's comprehensive research tool.
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