• Wondering whether Braze at US$19.43 is starting to look appealing or still has more risk than reward? This article breaks down what the current price could be telling you about value.
• The stock has been weak recently, with the share price down 11.4% over the last week, 5.7% over the last month, 40.3% year to date, and 47.1% over the past year. Moves like this can change how the market views its potential.
• Over recent months, attention on Braze has largely centered on how customer engagement platforms fit into broader software spending and where investors are willing to pay up for growth versus profitability. These debates have added extra scrutiny to valuations across the software sector, including Braze, and help explain some of the share price pressure.
• Braze currently has a valuation score of 5/6, which means it screens as undervalued on most of the checks used here. The next sections will break down how different valuation approaches arrive at that view and then finish with a framework that can help you think about value in an even more practical way.

Approach 1: Braze Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model projects a company’s future cash flows and then discounts them back to today using a required rate of return. The goal is to estimate what those future cash flows are worth in today’s dollars.

For Braze, the model used is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month free cash flow stands at about $53.5 million. Analysts have provided several years of cash flow estimates, and beyond that, Simply Wall St extrapolates further projections, with free cash flow in 2031 projected at $220.6 million and additional estimates running out to 2035.

After discounting this stream of projected cash flows back to today, the model arrives at an estimated intrinsic value of about $36.02 per share. Compared with the recent share price of $19.43, this implies the stock is trading at a discount of roughly 46.1%, which screens as materially undervalued on this DCF view.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Braze is undervalued by 46.1%. Track this in your watchlist or portfolio, or discover 47 more high quality undervalued stocks.

Approach 2: Braze Price vs Sales

For companies where profitability is still developing, the P/S ratio is often a useful way to think about value, because it compares what you pay for each dollar of revenue rather than each dollar of earnings.

What counts as a “normal” or “fair” P/S ratio usually reflects how much growth investors expect and how much risk they see in those revenues. Higher expected growth and lower perceived risk can support a higher multiple, while slower growth or higher uncertainty typically line up with a lower multiple.

Braze currently trades on a P/S of 2.99x. That sits below the Software industry average of 3.47x and also below the peer group average of 5.76x. Simply Wall St’s Fair Ratio framework estimates what a P/S multiple might make sense for Braze, at 3.77x, based on factors like its growth profile, industry, profit margins, market cap and risk characteristics. This is more tailored than a simple comparison with peers or the broad industry because it adjusts for Braze’s specific fundamentals rather than assuming all software stocks deserve the same multiple.

Comparing that Fair Ratio of 3.77x with the current 2.99x P/S suggests the stock screens as undervalued on this measure.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Braze Narrative

Earlier it was mentioned that there is an even better way to understand valuation. Narratives are simply your story about Braze, where you connect what you think will happen to its revenue, earnings and margins to an explicit fair value. You then compare that fair value with the current share price using an easy tool on Simply Wall St’s Community page that updates automatically when new news or earnings arrive. One investor might lean toward a bullish Braze narrative closer to US$50, another might align with a more cautious view near US$27, and you can quickly see how each story translates into numbers and whether it suggests the stock looks expensive or cheap against today’s price.

Do you think there's more to the story for Braze? Head over to our Community to see what others are saying!

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.