A Fresh Look at Braze (BRZE) Valuation Following Renewed Momentum and Investor Optimism

Braze (BRZE) shares moved higher after investors responded to the company’s continued growth in billings and its high customer retention. These results, along with upbeat tech earnings and hopes for lower interest rates, fueled broader market enthusiasm.

See our latest analysis for Braze.

After a choppy few months, Braze is showing signs of renewed interest, with a strong 7-day share price return of nearly 8% following upbeat billings and retention news. While the year-to-date share price return is still down more than 30%, momentum seems to be building as investor risk appetite shifts and broader tech optimism returns.

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With market optimism building and Braze’s fundamentals showing strength, the question for investors is whether the stock’s recent rally leaves it undervalued, or if expectations for future growth are already fully priced in.

Most Popular Narrative: 37.3% Undervalued

Braze’s fair value, according to the most closely-watched narrative, stands notably above the last close. There is a significant gap between where the market ended and the figure consensus expects, making the projections worth a closer look.

“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.”

Read the complete narrative.

Want to discover what really drives this higher valuation? The narrative leans on future transformation and bold growth projections not yet visible in the numbers. What is the linchpin for analysts’ optimism? Knowledge of these make-or-break assumptions could reveal if the opportunity is as big as the headline valuation suggests.

Result: Fair Value of $45.11 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing challenges with OfferFit integration and changing global data laws could limit Braze’s ability to deliver the margins and growth that analysts expect.

Find out about the key risks to this Braze narrative.

Another View: SWS DCF Model Puts a Different Spin on Valuation

While the consensus multiple-based fair value paints Braze as undervalued, our DCF model gives a different impression. According to this approach, Braze’s current share price of $28.27 sits above our DCF fair value estimate of $25.06. This suggests a more cautious outlook. Could the price target assumptions be too optimistic, or does the market see something models do not?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Braze for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Braze Narrative

If you see things differently or want to dig deeper into the numbers, you can shape your own perspective with ease in just a few minutes. Do it your way

A great starting point for your Braze research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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