Recent analyst reports on Braze (BRZE) reset expectations for software valuations while keeping broadly positive ratings, just as the company logged its strongest quarterly customer additions in three years. This combination highlights an interesting tension for investors.

At a share price of $17.79, Braze has seen pressure build, with a 30 day share price return of 40.84% and a year to date share price return of 45.35%. Meanwhile, the 1 year total shareholder return of 56.84% points to a tougher ride for longer term holders as analysts reset software valuations and investors reassess growth and risk.

If Braze’s recent moves have you thinking more broadly about the customer engagement and AI space, you might want to scan 56 profitable AI stocks that aren't just burning cash as a starting list of potential ideas.

With Braze trading at $17.79 and analyst targets clustered far higher, the stock screens as discounted on some measures. However, recent return figures tell a tougher story, raising the question of whether this is a reset buying opportunity or whether future growth is already priced in.

Most Popular Narrative: 61.9% Undervalued

At $17.79, Braze sits well below the most followed fair value estimate of $46.70, which leans heavily on AI driven customer engagement as a key driver.

Project Catalyst and new offerings such as Agentic AI promise better personalization and customer engagement, which can drive incremental revenue and improve net margins through the increased effectiveness and efficiency of marketing campaigns.

Curious what kind of revenue pace and margin shift would need to line up behind that AI story? The narrative leans on bold assumptions about future scale and profitability. The full breakdown shows exactly how those moving parts stack up to reach that $46.70 figure.

Result: Fair Value of $46.70 (UNDERVALUED)

However, there are real pressure points, including OfferFit integration risks and uncertainty around new AI budgets. These factors could challenge the assumptions behind that US$46.70 narrative.

Build Your Own Braze Narrative

If you read this and come to a different conclusion, or simply want to test your own assumptions against the data, you can build a custom Braze story in just a few minutes, starting with Do it your way.

A great starting point for your Braze research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.