Braze, Inc. (NASDAQ:BRZE) Released Earnings Last Week And Analysts Lifted Their Price Target To US$68.47

Braze, Inc. (NASDAQ:BRZE) just released its quarterly report and things are looking bullish. Results overall were solid, with revenues arriving 5.7% better than analyst forecasts at US$124m. Higher revenues also resulted in substantially lower statutory losses which, at US$0.31 per share, were 5.7% smaller than the analysts expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Braze

Taking into account the latest results, the consensus forecast from Braze's 16 analysts is for revenues of US$569.8m in 2025. This reflects a major 30% improvement in revenue compared to the last 12 months. Losses are expected to be contained, narrowing 19% from last year to US$1.09. Before this latest report, the consensus had been expecting revenues of US$555.8m and US$1.20 per share in losses. So there seems to have been a moderate uplift in analyst sentiment with the latest consensus release, given the upgrades to both revenue and loss per share forecasts for next year.

The consensus price target rose 20% to US$68.47, with the analysts encouraged by the higher revenue and lower forecast losses for next year. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Braze at US$80.00 per share, while the most bearish prices it at US$60.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Braze is an easy business to forecast or the the analysts are all using similar assumptions.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Braze's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 23% growth on an annualised basis. This is compared to a historical growth rate of 38% over the past three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 12% per year. So it's pretty clear that, while Braze's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Braze. Long-term earnings power is much more important than next year's profits. We have forecasts for Braze going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 3 warning signs for Braze that you need to be mindful of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.