Vast troves of customer data demand equally powerful tools in order for companies to use this information to better engage with customers. For marketing and customer data management firm Braze Inc. (NASDAQ: BRZE), traditional ways of combing through and sorting data are just the beginning.
The company offers tools that allow companies and marketers to automatically manage data ingestion, sync users and information across brands and partnerships, categorize customers according to a host of attributes to identify prime movers, and much more.
Braze's success in this rapidly growing field has earned it substantial attention from analysts across Wall Street. Twenty out of 21 firms that have rated Braze stock have labeled it a Buy, and the consensus price target of $53 per share is more than 48% above current price levels as of Apr. 1, 2025. Below, we'll look at some of the reasons why this $3.7 billion company stands out in the competitive customer engagement space.
1. Acquisition of OfferFit to Boost ROI for Customers
One of Braze's selling points is its integration of AI tools, which provides it with more robust mechanisms for analyzing customer data and making actionable recommendations to clients. In keeping with this crucial component of its product offerings, Braze recently announced it would acquire AI-decisioning company OfferFit for $325 million in cash and stock.
Braze expects that the acquisition will make it possible for its platform to achieve heightened messaging relevance. While the OfferFit acquisition is likely to modestly dilute operating income margins this year, the benefits should far outweigh the costs.
OfferFit’s existing products are expected to enhance Braze’s enterprise and global strategic accounts, helping all customers deliver more relevant messaging and drive improved ROI.
2. Impressive Earnings Beat Leads to Analyst Optimism
Braze's latest quarter, the final quarter of fiscal 2025, brought 22% in year-over-year (YOY) revenue gains and a third consecutive quarter of net income profitability, with a bonus of roughly $15 million in free cash flow. The company solidly outperformed analyst expectations for both the top and the bottom line. With earnings per share (EPS) of 12 cents compared to analyst predictions of just 5 cents, Braze used the quarter to firm up investor faith in its ability to remain profitable despite the ever-changing landscape of the customer engagement industry.
The strong earnings performance was enough for a handful of analysts to boost their price targets for BRZE shares. Stifle Nicolaus, Wells Fargo, Citigroup, Raymond James, and Needham & Co. were among firms reiterating or lifting price targets along with optimistic ratings.
3. Promising Outlook: Strong Customer Growth, Market Expansion, and Projected 17% YOY Revenue Increase
[content-module:Forecast|NASDAQ: BRZE]Braze's future outlook is promising. In its fourth-quarter earnings call, CEO and co-founder Bill Magnuson highlighted the company's continued new business success, including a large U.S. retailer, an EMEA energy firm, a U.S. fintech, and others, for a 12% YOY increase in total customers and 22% more customers spending at least $500,000 annually. The company expects to continue to gain market share as potential clients update their legacy programs to include Braze products. Importantly, Braze is also diversifying its customer base in terms of both geography and industry.
In terms of guidance, even without including the OfferFit acquisition—which should add about 2% to YOY revenue growth—the company anticipates revenue growth of about 17% YOY at the midpoint of expectations, and this is despite a shorter first quarter. Notably, the company also expects positive results for both operating income (in the range of $0 to $1 million) and net income ($4.5 million to $5.5 million).
Braze shares have declined by just over 16% year-to-date and 15% in the year leading to April 1, 2025. The company has a price-to-sales ratio of 6.3, which is made more compelling by the recent declines in share price. Still, some investors may find Braze to be somewhat overvalued and might seek a time to enter a position after a more protracted or pronounced dip in stock price. Either way, based on analyst predictions, even the current dip might provide ample room for capital appreciation should shares reach estimated price points.
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