Braze Gains Bullish Coverage Despite Double-Digit Stock Drop (NASDAQ:BRZE)

Braze Inc. (NASDAQ: BRZE) experienced a volatile trading session on Tuesday, marked by a significant price decline, followed by a newly initiated “Overweight” rating from Wells Fargo. The stock's performance reflects a complex interplay of positive analyst sentiment and immediate market reaction, presenting a mixed signal for investors.

BRZE shares plummeted 11.73% in yesterday's session, closing at $28.44, a stark contrast to the positive outlook offered by Wells Fargo. This drop contributes to a year-to-date decline of 34.45%, highlighting the challenges the company has faced in the current market environment. Intraday trading saw a high of $32.73 and a low of $28.40, with volume reaching 4,638,937.

Wells Fargo analyst Ryan MacWilliams initiated coverage with an “Overweight” rating and a $40 price target, suggesting substantial upside potential from the current price level. MacWilliams highlighted Braze's position as providing “infrastructure for customer engagement,” and its potential for improved revenue growth due to easing comparisons and an AI-friendly consumption model. The firm's analysis suggests that increased adoption of artificial intelligence will drive more marketing campaigns and, consequently, greater utilization of Braze's platform.

Braze's recent financial performance offers additional context. In the fiscal second quarter of 2026, the company reported revenue of $180.1 million, representing a 23.8% increase year-over-year. Subscription revenue accounted for $171.8 million, while professional services and other revenue contributed $8.3 million. Non-GAAP net income reached $16.9 million, or $0.15 per diluted share, exceeding analyst expectations. The company's customer base has expanded to 2,422, including 282 clients with annual recurring revenue exceeding $500,000.

Further bolstering its market position, Braze was recognized as a Leader in the 2025 Gartner® Magic Quadrant™ for Multichannel Marketing Hubs for the third consecutive year. This recognition underscores the company's strong vision and execution capabilities within the competitive landscape of customer engagement platforms.

Overall analyst sentiment towards Braze remains cautiously optimistic. The consensus rating is “Moderate Buy,” with an average price target of $45.11, implying a potential upside of approximately 44.2% from its current trading price. This consensus is based on a mix of buy and hold ratings, reflecting a degree of confidence in the company's long-term prospects.

The contrasting signals of positive analyst coverage and a significant stock decline highlight the complexities of market dynamics. While the “Overweight” rating from Wells Fargo and the company's strong financial performance suggest underlying strength, immediate market reactions can be influenced by broader economic factors or short-term investor sentiment.