Why Braze Stock Is Sinking Today
Key Points
A Stifel analyst reduced the price target on Braze stock.
Braze reported solid third quarter 2025 financial results, including strong year-over-year revenue growth and positive free cash flow.
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Starting the week on a dour note, Braze (NASDAQ: BRZE) stock is slipping today after an analyst lowered expectations for the tech stock.
As of 12:17 p.m. ET, shares of Braze are down 0.7%, paring back an earlier decline of 5.2%.
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Another Monday, another lower price target
For the second consecutive Monday, an analyst has slashed the price target on Braze stock. Today, Stifel analyst Parker Lane cut the price target on Braze stock to $40 from $45. While the stock has suffered from decreased investor sentiment, Lane, who maintains a buy rating, recognizes that the company offers growth opportunities. According to thefly.com, Lane advised investors that Braze is "a prime example of a company with an overlooked moat," noting that it is an artificial intelligence (AI) company poised to prosper.
Last Monday, Piper Sandler reduced its price target to $30 from $50, keeping an overweight rating on the stock.
Smart investors shouldn't be blinded by analysts' lowered expectations
Instead of focusing on price targets, a more prudent approach is to stress Braze's fundamentals -- not an individual's opinion about how high shares may climb. In the third quarter of 2025, Braze reported a 25% year-over-year increase in revenue and free cash flow of $17.8 million compared to negative free cash flow of $14.2 million during the same period last year.
Prospective investors should certainly not dismiss Braze stock as an option for gaining AI exposure. With shares trading at 2.7 times sales, a discount to the five-year average price-to-sales ratio of 6.2, Braze shares are hanging on the discount rack.
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Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Braze. The Motley Fool has a disclosure policy.
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