On Friday, TD Cowen maintained a positive stance on Braze Inc (NASDAQ:BRZE), reiterating a Buy rating with a consistent price target of $52.00. The firm's assessment followed Braze Inc's recent financial performance, which showcased a pattern of surpassing and elevating expectations, with a 3% beat and a 1% raise to their fiscal year 2025 guidance.
Despite a decline in shares by 5% after hours due to increased pressure on billings and net revenue retention (NRR) metrics this quarter, TD Cowen regards these fluctuations as transient. The firm anticipates a return to a more standard performance in the second half of the year. Additionally, Braze Inc's progress in gross margins and operating margins was highlighted as significant.
The firm's commentary noted the robust demand trends and sound execution that are expected to continue. The current valuation of Braze Inc's shares was deemed attractive, reinforcing the decision to maintain the Buy rating.
TD Cowen's perspective on Braze Inc remains unwavering despite the temporary volatility in certain financial metrics. The firm's confidence in the company's ability to deliver consistent financial performance and the attractiveness of its shares at the current valuation underpins their positive outlook.
In other recent news, Braze reported a strong fiscal second quarter in 2025, with revenues rising by 26% year-over-year to reach $145.5 million. This growth was accompanied by an addition of 61 new customers, increasing the total to 2,163, and the launch of the Braze data platform. Despite challenges in churn and the macro environment, Braze remains committed to long-term growth, efficiency, and profitability.
Analysts project that the company's Q3 revenue will fall between $147.5 million and $148.5 million, with full fiscal year 2025 revenue anticipated to be between $582.5 million and $585.5 million. Braze's non-GAAP operating income was reported at $4.2 million, representing 3% of revenue, and the company ended the quarter with $504 million in cash and cash equivalents.
InvestingPro Insights
TD Cowen's endorsement of Braze Inc (NASDAQ:BRZE) is supported by several key metrics and insights from InvestingPro. With a market capitalization of $4.48 billion, Braze is recognized for holding more cash than debt, providing a stable financial footing. Additionally, the company's liquid assets surpass short-term obligations, indicating a robust liquidity position. Despite analysts not expecting profitability this year and the company not being profitable over the last twelve months, Braze has demonstrated strong returns, with an 18.66% increase over the last month and a 19.98% rise over the last three months. These returns signal investor confidence and a potentially opportunistic entry point for those considering Braze's stock.
However, investors should be aware of Braze's high valuation multiples, trading at a Price/Book multiple of 9.89, which suggests a premium compared to industry peers. The company's revenue growth remains impressive, with a 31.12% increase over the last twelve months as of Q2 2025, reflecting the company's ability to expand its top-line figures effectively.
For those interested in a deeper analysis, InvestingPro offers additional tips on Braze Inc, which can be accessed at https://www.investing.com/pro/BRZE. These insights could provide further clarity on the company's financial health and growth prospects, enhancing investment decisions.
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