TSP Weekly Tech Stock Update—March 22, 2025
This Week: Google buying Wiz, Morgan Stanley likes CRWD & PANW, Guggenheim bullish on RBRK, Monday's AI initiatives, BRZE is one to watch, AAPL's next growth catalyst, Datadog shares stabilize & more.
Hello from Rob…
—Earnings To Watch: Braze (BRZE, $37.03), a provider of a customer engagement platform for B2C use cases, will report FQ4 (Jan.) results on Thursday, March 27. The company is forecasting total revenue of $155 million to $156 million. The consensus estimate of $155.7 million represents growth of 18.9%.
In FQ3 (Oct.), Braze’s top-line rose 23% to $152.1 million, 2.7% above the consensus.
For FY’25 (Jan.), the company’s latest total revenue guidance range of $588 million to $589 million represents growth of 24.7% at the midpoint.
Back in March 2024, Braze offered conservative initial FY’25 top-line guidance of $570 million to $575 million (growth of 21.3% at the midpoint). At that time, the weaker-than-expected outlook caused the stock to drop 12% in one session.
For FY’26, the consensus revenue estimate of $688.1 million indicates a growth slowdown to +16.9%. Raymond James recently lowered its growth projections for the year due to overall marketing budgets remaining challenging, but sees Braze as a market-share gainer over the long term, as brands look to leverage rich, first-party data and the company’s real-time orchestration capabilities.
This week, Stephens initiated Braze at ‘Overweight’ with a price target of $43, saying the company could benefit from increased marketing spend when the macro environment improves. Also, the firm thinks Braze could benefit most among its peers from new legacy replacement logo wins from Salesforce (CRM) re-platforming its Marketing Cloud.
In the October quarter, Braze announced BrazeAI agent (codenamed Project Catalyst), which is designed to deliver better customer engagement by rapidly creating, testing and optimizing thousands of experience variations. Looking ahead, AI features could begin to accelerate Braze’s revenue growth via pricing power and increased messaging volumes, according to Macquarie.
*Inside This Issue: AI Fuels Healthy Cybersecurity Demand
—Paid subscribers will receive the April 2025 PDF of Tech-Stock Prospector (TSP #278) via email on Tuesday, April 8.
—Paid subscribers have access to the TSP Market Overview and TSP Portfolio Updates sections inside this issue.