BTIG on Monday adjusted its outlook on Blaze Inc. (NASDAQ:BRZE) stock, lowering its price target from $75 to $68 while maintaining a Buy rating. The company cited fourth-quarter results that exceeded revenue expectations by $6 million despite challenging macroeconomic conditions and increased spending oversight in the enterprise sector.
Braze's performance was highlighted by its success in winning new business with large customers and strengthening its position as a leading product in the market. Specifically, his customers with annual recurring revenue (ARR) of more than $500,000 increased by 29% year-over-year and accounted for approximately 60% of his total ARR, up from 57% in the previous year.
This segment saw ARR increase of nearly 40% with an overall net dollar retention rate of 120% compared to 117%. This growth among Braze's largest customers, the most widespread users of the product, underscores the strategic value of the platform.
Management's confidence is reflected in its plans to resume hiring in go-to-market roles, indicating an optimistic outlook for demand for Braze's products. The company's fiscal 2025 guidance was broadly in line with analyst expectations prior to the report's release, but given the strong fourth quarter sales and management's comments on improving macroeconomic conditions, the company's fiscal year 2025 guidance is now appears to be conservative.
BTIG's ongoing research supports the view that Braze is becoming an essential component for businesses looking to improve return on investment for their sales and marketing budgets. This outlook is supported by the company's 40% year-over-year increase in its remaining performance obligations (RPO) in the fourth quarter.
Investment Pro Insights
As Braze Inc (NASDAQ:BRZE) continues to navigate the enterprise software market, recent data from InvestingPro provides additional context for investors considering the stock. With a market capitalization of $4.44 billion, Blaze has more cash than debt on its balance sheet, suggesting a strong financial position. Despite the challenging macroeconomic environment, Braze's revenue growth remains strong, increasing 32.74% over the past 12 months as of Q4 2024, demonstrating strong demand for its customer engagement platform.
From an investment perspective, two tips from InvestingPro that stand out are the company's Relative Strength Index (RSI), which suggests the stock is currently in oversold territory, and liquidity. The fact that assets exceed short-term debt provides financial flexibility. Furthermore, although analysts have revised down their revenue estimates and do not expect profitability this year, the company's strategic value and growth in large customer segments could provide long-term benefits.
For those considering investing in Braze or looking for a more in-depth analysis, InvestingPro provides a wealth of information.By using coupon code pro news 24, new subscribers can get an additional 10% off annual or biennial Pro and Pro+ subscriptions. Over 10 more of his InvestingPro tips are available for Braze Inc and can be accessed at https://www.investing.com/pro/BRZE.
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