Last Update 12 Dec 25

Fair value Increased 4.31%

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.

Braze's strategic acquisitions and AI enhancements are poised to boost revenue growth and market differentiation, improving earnings and net margins.
Geographic and vertical diversification, alongside large customer additions, promise strong revenue growth and better operating margins across various global industries.
OfferFit integration challenges and evolving data laws could impact Braze's net margins and scalability, while partner pricing dynamics threaten revenue stability.

Catalysts

About Braze

Operates a customer engagement platform that provides interactions between consumers and brands worldwide.What are the underlying business or industry changes driving this perspective?

Braze's acquisition of OfferFit is expected to enhance AI-driven optimization capabilities and lead to revenue growth through deal size expansion and differentiation in the market. This investment should drive better earnings and net margins as OfferFit's sophisticated AI solutions integrate into Braze's platform.
The increasing trend of legacy vendor replacement and vendor consolidation creates opportunities for Braze to capture more market share, leading to revenue expansion as brands upgrade to modern customer engagement strategies.
Braze's expansion of its Shopify integration and e-commerce capabilities should lead to higher engagement and conversion rates for customers, potentially boosting revenue through increased adoption in the retail and consumer goods verticals, which accounts for a significant portion of Braze's business.
Project Catalyst and new offerings such as Agentic AI promise better personalization and customer engagement, which can drive incremental revenue and improve net margins through the increased effectiveness and efficiency of marketing campaigns.
Continued geographic and vertical diversification, as well as strong large customer additions, are likely to drive robust revenue growth and improved operating margins as Braze expands its presence in industries like fintech, retail, energy, and telecommunications globally.

Braze Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Braze's revenue will grow by 17.9% annually over the next 3 years.
Analysts are not forecasting that Braze will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Braze's profit margin will increase from -16.8% to the average US Software industry of 13.1% in 3 years.
If Braze's profit margin were to converge on the industry average, you could expect earnings to reach $133.0 million (and earnings per share of $1.11) by about September 2028, up from $-103.9 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 50.4x on those 2028 earnings, up from -28.8x today. This future PE is greater than the current PE for the US Software industry at 36.6x.
Analysts expect the number of shares outstanding to grow by 2.81% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.49%, as per the Simply Wall St company report.

Braze Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The integration of OfferFit into Braze is expected to be modestly dilutive to non-GAAP operating income margins in the fiscal year, potentially impacting the company's net margins.
Braze's reliance on ongoing high-performance marketing engagements and value selling, while beneficial, also suggests a dependency on sophisticated client setups which might limit scalability and revenue growth if not executed well.
Concerns around evolving international data sovereignty laws and data center expansions could lead to increased operational costs and impact future net margins.
Any misalignment or delays in integrating OfferFit's technology with Braze’s platform could result in unexpected costs and disruptions, affecting both net margins and earnings.
The dynamic pricing and evolving strategies of partners like Meta, especially regarding quickly changing messaging channels, pose a risk to predictable revenue streams and might impact both short and longer-term earnings stability.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $43.722 for Braze based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $68.0, and the most bearish reporting a price target of just $35.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $1.0 billion, earnings will come to $133.0 million, and it would be trading on a PE ratio of 50.4x, assuming you use a discount rate of 8.5%.
Given the current share price of $26.99, the analyst price target of $43.72 is 38.3% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

OfferFit Integration And Shopify Expansion Will Open New Markets