Oppenheimer reiterates Outperform rating on Braze stock after strong quarter

Braze Inc. (BRZE) reported strong fiscal Q2 2026 results, significantly surpassing revenue and EPS expectations with $180.1 million in revenue (24% Y/Y growth) and $0.15 EPS. Analysts largely reacted positively; Oppenheimer reiterated an Outperform rating and $38 price target, citing broad-based strength and potential net revenue retention (NRR) expansion, while Mizuho raised its target to $45 and UBS adjusted to $43, all maintaining Buy ratings. Despite some gross margin pressure, the consensus reflects confidence in Braze's sustained organic growth trajectory and reasonable valuation multiples.

Analysis

Braze Inc. (BRZE) delivered a significant beat-and-raise quarter for its fiscal Q2 2026, signaling strong operational execution. The company reported revenue of $180.1 million, representing 24% year-over-year growth (22% organic) and surpassing projections by nearly 5%. Earnings per share were particularly impressive at $0.15, massively exceeding the $0.03 forecast. Analyst commentary reinforces this positive momentum, with Oppenheimer highlighting broad-based strength in customer RPOs, new acquisitions, and stabilizing net revenue retention (NRR). Despite this, two key headwinds were noted: a 160 basis point year-over-year decline in gross margin, attributed to a shift toward premium messaging channels, and an admission that NRR has not yet reached its bottom. Nevertheless, the analyst consensus remains optimistic. Oppenheimer views the current valuation multiples as reasonable and anticipates stabilizing NRR trends could catalyze future expansion. This confidence is echoed by Mizuho, which raised its price target to $45 from $40, and UBS, which maintained a Buy rating while adjusting its target to $43, with both citing sustained demand and strong growth prospects.

Key Decisions for Investors

• Given the significant earnings beat, sustained 20%+ organic growth, and positive analyst price target revisions, investors may view the current valuation as a reasonable entry point for a durable growth asset.
• It is critical to monitor two key operational metrics in subsequent quarters: the stabilization and potential expansion of net revenue retention (NRR) and the trajectory of gross margins, which have seen a 160 basis point decline due to product mix shifts.
• The consensus among analysts remains bullish with 'Buy' or 'Outperform' ratings, suggesting institutional confidence in the top-line growth story and its ability to outweigh near-term gross margin pressure.