BRZE: Gen AI Monetization Is Expected To Drive Customer Engagement Upside

Analysts have nudged their fair value estimate for Braze higher from $45.11 to $47.06, citing its positioning as a leading beneficiary of Gen AI monetization in customer engagement software and its resilience amid AI related competitive headlines across front office marketing tools.

Analyst Commentary

Bullish analysts highlight Braze as a prime way to gain exposure to Gen AI monetization in customer engagement, with recent research pointing to strong early adoption signals and a supportive competitive backdrop.

Bullish Takeaways

• Bullish analysts view Braze as a top pick within application software, arguing that customer engagement and marketing platforms are among the best positioned to translate Gen AI functionality into incremental revenue growth and margin expansion.
• Feedback from more than 50 recent customer discussions points to active pilots and proof of concept projects that are already demonstrating measurable value. This reinforces confidence in Braze's ability to convert experiments into production level deployments and subscription upsells.
• Analysts see a favorable setup into 2026, as current pilots are expected to intersect with new budget cycles. This may support an acceleration in deal sizes, net retention, and multi year contract commitments that underpin higher fair value estimates.
• While AI headline risk has pressured the broader front office marketing cohort, some investors view Braze's more focused positioning as a relative winner. There may be upside to share gains if legacy marketing stacks struggle to match Braze's pace of AI feature delivery and integration.

Bearish Takeaways

• Bearish analysts caution that AI driven tools from larger platforms and foundation model providers could increase competitive intensity across front office marketing. This may add uncertainty to Braze's long term pricing power and limit multiple expansion.
• The introduction of new AI based inbound marketing tools has raised investor concerns that budgets may consolidate around broader ecosystems. This creates headline risk for customer engagement vendors including Braze and may drive periods of multiple compression despite solid execution.
• There is some skepticism around the timing and magnitude of Gen AI monetization, with bearish analysts warning that proof of concept activity may take longer than expected to translate into scaled deployments. This could push out revenue inflection and constrain near term upside to estimates.
• Macro and budget visibility into 2026 remains imperfect, and more cautious voices flag the risk that enterprises may re prioritize or delay marketing technology spend if broader IT budgets tighten. This could challenge Braze's ability to fully capitalize on its current pipeline of AI initiatives.

What's in the News

• Braze initiated guidance for fiscal Q4 2026 with expected revenue of 197.5 million to 198.5 million dollars and updated full year fiscal 2026 revenue guidance to 730.5 million to 731.5 million dollars (corporate guidance).
• BrazeAI Decisioning Studio is now available on Google Cloud Marketplace, streamlining procurement and deployment of Braze’s AI decisioning capabilities within Google Cloud environments and deepening its collaboration with Google Cloud (client announcement).
• At its Forge 2025 conference, Braze unveiled new platform enhancements, including Zero copy Canvas Triggers, expanded WhatsApp and RCS features, and tools like Drag and Drop Form and Email Product Blocks to support more personalized, cross channel campaigns (product related announcement).
• Braze launched breakthrough BrazeAI products, including BrazeAI Decisioning Studio, BrazeAI Operator, and BrazeAI Agent Console, enabling configurable AI agents, generative content, and deeper integration with data platforms like Snowflake Cortex AI (product related announcement).
• Jasper and Braze announced a strategic integration that combines Jasper’s AI content engine with Braze’s real time orchestration to accelerate campaign creation, deepen personalization, and maintain on brand messaging at scale (client announcement).

Valuation Changes

• The fair value estimate has risen slightly, moving from approximately $45.11 to $47.06 per share. This reflects modestly higher long-term cash flow expectations.
• The discount rate has increased marginally from about 8.49 percent to 8.52 percent. This indicates a slightly higher required return and risk adjustment in the model.
• The revenue growth forecast has edged down slightly from around 17.63 percent to 17.54 percent. This suggests a modestly more conservative view on top-line expansion.
• The net profit margin assumption has decreased very slightly from roughly 12.43 percent to 12.42 percent. This implies a nearly unchanged long-term profitability outlook.
• The future P/E multiple has fallen slightly from about 59.1 times to 58.9 times. This signals a marginally lower valuation multiple applied to projected earnings.