Key Takeaways:
- AI Innovation: Braze is rapidly deploying AI-driven customer engagement tools, with strong early adoption of decisioning agents and conversational capabilities.
- Price Projection: Based on current execution, BRZE stock could reach $26 by January 2028.
- Potential Gains: This target implies a total return of 51% from the current price of $17.
- Annual Return: Investors could see roughly 24% growth over the next 1.9 years.
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Braze (BRZE) delivered a strong third quarter in fiscal 2026, with revenue increasing 25.5% year-over-year to $191 million, and raised full-year guidance across all key metrics.
CEO Bill Magnuson highlighted robust momentum across both new business wins and existing customer expansions.
- The company now expects fiscal 2026 revenue to reach approximately $731 million, representing 23% year-over-year growth.
- The company added 106 customers sequentially and 317 year over year to reach 2,528 total customers, marking the strongest quarterly customer additions in three years.
- Large customers spending over $500,000 annually grew 29% year-over-year to 303, now contributing 63% of total ARR.
- Mobile data consumption continues accelerating, with brands leveraging AI to create sophisticated cross-channel campaigns.
- During this year’s Cyber Week, Braze delivered 102.5 billion messages with peak throughput reaching 28.5 million messages per minute, demonstrating the platform’s scale and reliability.
- SMS and WhatsApp message sends surged 90% year-over-year during the Black Friday to Cyber Monday period, while email grew 32%.
- Braze’s AI innovations are fundamentally changing customer engagement. The company’s AI Decisioning Studio uses reinforcement learning to continuously experiment and personalize campaigns at scale.
- One U.S. e-commerce brand deployed the technology to manage approximately 5.1 quintillion permutations, delivering a 12% uplift in app downloads and 15% increase in premium membership conversions.
The Agent Console enables marketers to create custom AI agents that process unstructured data and respond interactively.
Healthcare provider Aeroflow Health built an SMS conversational ordering system using the Agent Console, which drove tens of thousands of additional annual orders.
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What the Model Says for Braze Stock
We analyzed Braze as it transformed into the leading AI-powered customer engagement platform.
The company benefits from multiple growth drivers. Competitive takeaways from legacy marketing clouds continue as brands migrate to modern, AI-driven solutions.
This quarter saw wins across diverse industries, including a global appliance manufacturer, a North American financial services firm, and luxury goods retailers in APAC.
International expansion remains strong, with revenue outside the U.S. contributing 45% of total revenue. Dollar-based net retention stabilized at 108%, while organic dollar-based net retention improved for the second consecutive quarter to over 107%.
Using a forecast of 19.1% annual revenue growth and 8.2% operating margins, our model projects the stock will rise to $26 within 1.9 years. This assumes a 29.2x price-to-earnings multiple.
That represents compression from Braze’s historical P/E averages of 103.3x (one year) and 83.3x (three years). The lower multiple acknowledges the company’s transition toward profitability, with management targeting 8% non-GAAP operating margins for fiscal 2027.
The real value lies in capturing the shift from legacy marketing platforms to AI-powered customer engagement while expanding through new products like Decisioning Studio and the Agent Console.
Our Valuation Assumptions
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Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for BRZE stock:
1. Revenue Growth: 19.1%
Braze’s growth centers on structural demand for AI-powered customer engagement and platform consolidation.
The company delivered 25.5% year-over-year revenue growth in Q3, with Braze AI Decisioning Studio contributing approximately 2 percentage points to full-year growth.
Management expects continued momentum as customers adopt more channels and AI solutions.
Pipeline generation remained solid throughout the quarter, indicating sustained market demand.
The competitive landscape favors Braze as legacy platforms stagnate while smaller point solutions consolidate.
2. Operating margins: 8.2%
Braze has dramatically improved profitability, delivering four consecutive quarters of non-GAAP operating income.
Third quarter non-GAAP operating margin reached 2.7%, representing a 400 basis point improvement year-over-year.
Management guides to 8% non-GAAP operating margins for fiscal 2027, demonstrating a continued commitment to balancing growth with profitability.
This reflects operational efficiencies in sales and marketing while maintaining disciplined R&D investment at 15% of revenue.
3. Exit P/E Multiple: 29.2x
The market values Braze at approximately 30x earnings today. We assume the P/E will compress slightly to 29.2x over our forecast period as the company scales and profitability becomes more predictable.
As Braze demonstrates consistent execution in AI innovation and enterprise customer wins, the company should command a premium multiple that reflects its leadership position in a high-growth category with strong competitive moats.
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What Happens If Things Go Better or Worse?
Customer engagement platforms face technology transitions and competitive dynamics. Here’s how Braze stock might perform under different scenarios through January 2030:
- Low Case: If revenue growth slows to 14.7% and net income margins compress to 10.0%, investors still see a 75.7% total return (15.3% annually).
- Mid Case: With 16.3% growth and 10.7% margins, we expect a total return of 131.2% (23.6% annually).
- High Case: If AI adoption accelerates, driving 17.9% revenue growth while Braze maintains 11.4% margins, returns could hit 198.5% total (31.9% annually).
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The range reflects execution on AI product innovation, successful enterprise platform replacements, and the ability to expand profitability while investing in next-generation capabilities.
In the low case, competition intensifies or AI adoption moderates below expectations.
In the high case, Braze captures accelerating vendor consolidation, Decisioning Studio drives significant upsells, and international expansion exceeds projections.
How Much Upside Does Braze Stock Have From Here?
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All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
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From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
