Shares of Braze Inc (NASDAQ:BRZE) tanked on Wednesday, despite the company reporting upbeat fiscal second-quarter results.
Here are some key analyst takeaways:
- Stephens analyst Brett Huff maintained an Overweight rating, while raising the price target from $31 to $34.
- Citizens JMP Securities analyst Patrick Walravens reiterated a Market Outperform rating and price target of $35.
- BTIG analyst Nick Altmann reaffirmed a Buy rating and price target of $35.
- Needham analyst Scott Berg maintained a Buy rating and price target of $50.
Check out other analyst stock ratings.
Stephens: Braze reported total revenues, subscription revenues, billings and pro forma EBIT ahead of Street expectations, Huff said in a note. Management raised their third-quarter and fiscal 2027 guidance, he added.
Despite the strong results and guidance raise, Braze was "got caught up" in a deceleration narrative, with cRPO (current remaining performance obligation) growth declining in the second quarter, the analyst stated. The company is a long-term AI-winner and a near-term "proof-point for AI ROI," and the weakness in the stock is a "buying opportunity," he further wrote.
Citizens JMP Securities: Braze reported revenue of $227.2 million and non-GAAP earnings of 19 cents per share, topping consensus estimates of $220.3 million and 15 cents per share, respectively, Walravens said. BrazeAI Decisioning Studio’s revenues grew 16% sequentially and 136% year-on-year to of $6.6 million, he added.
The analyst stated that management’s third-quarter guidance was mixed:
- Revenue projected at $229-$230 million, above consensus of $227.6 million.
- Earnings forecast at 13 cents to 14 cents per share, lower than consensus of 16 cents per share.
"While cRPO decelerated in the quarter and some business shifted from subscription to services, we continue to view Braze as an attractive opportunity for long-term capital appreciation," he further wrote.
BTIG: Braze’s revenue growth of 26% came in meaningfully higher than consensus of 22%, Altmann said. He added, however, that organic growth did not accelerate for the first time in several quarters, as the upside was due to OfferFit’s revenue contribution of $6.6 million.
Although the company’s cRPO grew 24% despite tough comps, it came slightly below the consensus estimate of 25%, the analyst stated. Braze indicated that renewal strength in the first quarter makes the sequential change "look optically lower" in the second quarter; overall bookings growth was strong and cRPO continued to grow organically at over 20%, he further noted.
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Needham: Braze reported "another strong sales quarter," although growth in organic revenue and bookings moderated "a few points," Berg said. The company’s cRPO growth decelerated from 28.4% year-on-year in the first quarter to 23.8% in the latest quarter, he added.
Net customer additions and net recurring revenues (NRR) continue to grow, "suggesting to us trends for core customer engagement solutions and its new AI modules are strong," the analyst wrote. This should enable Braze to sustain 20% organic revenue growth until at least late fiscal 2028, he further stated.
BRZE Price Action: Shares of Braze had declined by 19.04% to $24.54 at the time of publication on Wednesday.
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