New York-based Braze, Inc. (NASDAQ: BRZE) enhances the communication experience between brands and consumers via its customer engagement platforms. Solutions offered by this newly-listed company address the needs of travel & hospitality, media & entertainment, retail & e-commerce, and other industries. The company’s solid fundamentals and prospects have the potential to lure investors seeking exposure in the technology space.
Founded in 2011, Braze went public through an initial public offering (IPO) of eight million shares in November 2021. The IPO price was $65 per share. The stock’s first trading day was November 17, 2021. Since its IPO, shares of this $4.1-billion company have declined 53.5%. The stock has, however, grown 11.2% in the past month.
Despite the stock price plunge, analysts are unanimously optimistic about the prospects of Braze and have a Strong Buy consensus rating based on 11 Buys. BRZE’s average price forecast is $48.82, representing upside potential of 12.31% from the current level.
Why Is the Street Optimistic about Braze?
Braze derives its strength from a large addressable market and a solid customer base, which includes prominent players like Pizza Hut, HBO Max, and Venmo. Exiting the first quarter of Fiscal 2023 (ended April 30, 2022), Braze had 1,503 customers in nearly 60 countries.
The demand for Braze’s solutions is supported by favorable trends, which include efforts to enhance customer experience, customers expecting personalized interactions, and data for effective management of customers.
In addition to these tailwinds, Braze’s constant effort to provide customers with better solutions, like Braze for Success, Braze Canvas Flow, and Braze for Commerce, enhances its competitiveness.
In June 2022, Braze’s Co-Founder and CEO, Bill Magnuson, said, “Given our strong momentum, we are raising our 2023 outlook and remain committed to delivering best-in-class customer engagement at scale, while running our business with discipline and efficiency.”
For Fiscal 2023 (ending January 2023), the company anticipates revenues to be within the $345-$349 million range, higher than the $338-$342 million stated earlier. Also, the revised projection is above the year-ago tally of $238 million.
For the second quarter of Fiscal 2023, revenues are forecast to be $80.5-$81.5 million, better than the $77.5 million generated in the first quarter of Fiscal 2023.
The company expects to incur a loss of $0.78-$0.82 per share in Fiscal 2023 versus a loss of $0.80-$0.84 per share anticipated earlier.
Incurring losses is very common for a nascent company like Braze. Its solid top-line prospects (as discussed above) and management abilities might help turn the tables for the company in the years ahead.
A few days ago, Patrick Walravens of JMP Securities reiterated a Buy rating on BRZE with a price target of $52 (19.62% upside potential).
Another analyst, Taylor McGinnis of UBS initiated coverage on BRZE with a Buy rating and a price target of $53 (21.92% upside potential).
Investors, Too, Are Very Positive about BRZE Stock
According to TipRanks, investor sentiment is Very Positive on BRZE. The number of portfolios holding BRZE stock has increased 1.2% in the last 30 days and 3.3% in the last seven days.
Concluding Remarks for BRZE Investors
A large addressable market, solid customer base, and technological expertise supporting innovations are some of the major tailwinds for this recently-listed company. Further, gaining exposure to BRZE stock at current price levels could prove to be beneficial for long-term investors.
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