Market volatility has surged in 2025, with the CBOE Volatility Index recently climbing above 20 and briefly spiking near 28, its highest level of the year so far. Despite this turbulent environment causing many investors to shy away from growth stocks, analysts are pointing to Braze stock as a compelling long-term opportunity in the customer engagement platform sector. The cloud-based software company has seen shares fall 41% year-to-date, yet Wall Street forecasts suggest potential triple-digit upside over the coming year.
Braze operates a customer engagement platform that enables businesses to deliver personalized messages across multiple channels including mobile push notifications, email, in-app messaging, and web notifications. The company reported $191 million in revenue during the third quarter of fiscal 2026, according to recent financial disclosures, representing a 25.5% year-over-year increase.
Strong Growth Amid Software Sector Weakness
While many software-as-a-service companies face headwinds from AI disruption concerns and compressed valuations, Braze continues to demonstrate robust expansion. The company added customers at a rapid pace, reaching a total of 2,528 clients in the third quarter, up 14% year-over-year. Additionally, the number of large customers spending at least $500,000 annually increased 29% to 303 accounts, indicating strong demand among enterprise clients.
Remaining performance obligations stood at $891.4 million in the third quarter, with management expecting to recognize $572.7 million within the next year. This metric suggests sustained demand for the customer engagement platform across various industries and geographic markets.
Path to Profitability Reduces Investment Risk
Beyond revenue expansion, Braze has made significant progress toward profitability, a crucial factor for growth stocks during volatile market conditions. The company reported four consecutive quarters of adjusted operating income and six straight quarters of adjusted net income. Furthermore, Braze generated $18 million in free cash flow during the third quarter, demonstrating improved operational efficiency.
Management projects full-year adjusted earnings between $0.42 and $0.43 per share for fiscal 2026, a substantial increase from $0.17 per share in fiscal 2025. This shift toward consistent profitability helps differentiate Braze from many high-growth technology companies that continue burning cash.
AI Integration Drives Competitive Advantage
The company has invested extensively in artificial intelligence capabilities to enhance its customer engagement solutions. According to management, a large e-commerce customer using Braze’s AI decisioning tools experienced a 12% increase in app downloads and a 15% rise in premium membership conversions. These AI-powered features help businesses automate engagement decisions and personalize marketing campaigns more effectively.
Analysts project Braze’s revenue will increase 23.2% to $731.2 million in fiscal 2026, while earnings are expected to surge 147.6%. Looking ahead to fiscal 2027, earnings could rise another 51.3% to $0.64 per share on revenue of $858.4 million, according to consensus estimates.
Analyst Outlook on Braze Stock Remains Bullish
Wall Street maintains overwhelmingly positive sentiment toward the stock, with 19 of 22 analysts rating it a “Strong Buy,” two recommending “Moderate Buy,” and one suggesting “Hold.” The mean analyst price target sits at $44.15, implying 122% upside potential from current levels. Meanwhile, the high target price of $68 suggests shares could climb as much as 241% over the next 12 months.
The stock currently trades at approximately 30 times forward fiscal 2027 earnings. This valuation appears reasonable relative to the company’s double-digit revenue growth trajectory and accelerating earnings expansion, particularly when compared to other software stocks struggling to justify premium multiples.
Investors will likely monitor Braze’s fourth-quarter results and fiscal 2026 guidance closely to assess whether the company can maintain its growth momentum and profitability improvements amid ongoing market uncertainty. The timing of the next earnings report has not been officially confirmed by the company.
