Why Braze Shares are Down Despite Earnings Beat By Investing.com

By Senad Karaahmetovic 

Shares of Braze (NASDAQ:) are down more than 5% in early Tuesday trading despite the company reporting better-than-expected Q2 results.

Braze a loss per share of $0.16 to beat the analyst consensus of a loss per share of $0.20. Revenue came in at $86.1 million to top the analyst estimate of $81.16 million.

“Despite macroeconomic headwinds and the challenges they present, we remain confident in the durability of our business and the overall promise of our customer engagement platform and a massive addressable market,” said Bill Magnuson, cofounder and CEO of Braze.

For this quarter, Braze expects a loss per share in the range of $0.23 to $0.22, worse than the analyst consensus of a loss per share of $0.20. Revenue is seen at between $90 million and $91 million, slightly ahead of the $90.3 million consensus.

On a full-year basis, the loss per share is seen between $0.79 and $0.77, modestly better than the consensus of a loss per share of $0.80. Revenue is expected at $348.5 million (the midpoint of the guidance), higher than the $346.83 million consensus.

Despite the earnings and full-year guidance beat, shares are down in premarket trading as analysts are concerned about longer sales cycles.

Despite these concerns, a Needham & Company analyst remains positive on Braze shares.

“Macro pressure is impacting 2HF23 guidance (especially 4Q revenues) which we view as prudent given the macro backdrop and relatively in line with most 4Q implied guidance in our universe this quarter,” he wrote in a note.

A JPMorgan analyst raised the price target to $47 from $42 on Overweight-rated Braze shares.

“We think Braze continues to execute well and while we expect billings to remain noisy in the NT, we look toward relative resiliency in RPO and revenue growth as Braze navigates through the choppy macro backdrop,” the analyst said in a research note.