What Happened?
Shares of customer engagement software provider Braze (NASDAQ: BRZE) jumped 3.8% in the morning session after Mizuho Securities initiated coverage on the stock with an 'Outperform' rating and a $40 price target. The 'Outperform' rating indicated Mizuho's confidence that Braze's stock would perform better than the broader market. In its report, the firm highlighted the company's strong customer engagement platform and identified several avenues for long-term growth. These key drivers included a focus on specific industry sectors, international expansion plans, and a growing partner network. The analyst's view of the stock's price as an appealing entry point for investors also likely contributed to the positive market reaction.
After the initial pop the shares cooled down to $28.37, down 0.3% from previous close.
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What Is The Market Telling Us
Braze’s shares are very volatile and have had 28 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 11 months ago when the stock dropped 20.6% on the news that the company reported second-quarter results. Its billings unfortunately missed, and its net revenue retention decreased. On the other hand, Braze's revenue, adjusted operating income, and EPS outperformed Wall Street's estimates. It was also good to see its full-year revenue and EPS guidance top expectations. Overall, this was a weaker quarter for the company.
Braze is down 34.6% since the beginning of the year, and at $28.37 per share, it is trading 39.9% below its 52-week high of $47.22 from January 2025. Investors who bought $1,000 worth of Braze’s shares at the IPO in November 2021 would now be looking at an investment worth $303.78.
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