What Happened?
Shares of customer engagement platform Braze (NASDAQ: BRZE) jumped 3.3% in the morning session after the company's recently reported strong second-quarter results prompted positive actions from several Wall Street analysts.
The customer engagement platform posted impressive second-quarter numbers, with revenue beating expectations by 5% and surging 24% compared to the previous year. The company’s operating margin, a key measure of profitability, also outpaced estimates by a notable 300 basis points. These strong results led analysts to reaffirm their confidence in the stock. Goldman Sachs maintained its Buy rating, TD Cowen lifted its price target to $40.00 after the company delivered its biggest earnings beat in six quarters, and Oppenheimer reiterated its Outperform rating.
After the initial pop the shares cooled down to $32.58, up 4.6% from previous close.
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What Is The Market Telling Us
Braze’s shares are very volatile and have had 25 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 previous big move we wrote about was 7 days ago when the stock dropped 3.3% on the news that markets pulled back, reversing early gains, as investor sentiment remained cautious despite a softer-than-expected inflation reading.
Stocks rose in the morning session after an unexpected drop in the Producer Price Index (PPI) for August signaled easing inflation and raised expectations for a potential Federal Reserve interest rate cut. The U.S. Bureau of Labor Statistics reported that the PPI, which measures wholesale prices, edged down 0.1% last month, contrary to analyst expectations for a 0.3% rise. This data gives the Federal Reserve more flexibility to consider lowering interest rates to stimulate the economy.
Braze is down 24.9% since the beginning of the year, and at $32.58 per share, it is trading 31% 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 $348.86.
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