Growth stock Braze is the IBD 50 Stocks To Watch pick for Monday as it offers a fresh buying opportunity.
The software firm offers a customer engagement platform. It operates in industries including retail and e-commerce, media, financial services, and travel and hospitality.
Braze stock has been on a monster run so far in 2023, rising nearly 100%. And while it has yet to turn a profit, the stock is seeing accumulation rise among top Wall Street funds.
Growth Stock Braze Clears Buy Point
Braze stock is trading in a buy zone after clearing a consolidation pattern with an ideal entry point of 50.13, MarketSmith analysis shows. The 5% buy zone here tops out at 52.64 and is a second-stage pattern, which still counts as an early stage. This is a plus.
Further, the relative strength line is moving higher again, a good sign as it attempts a breakout. Stock market performance in particular is strong, with BRZE in the top 2% of stocks in terms of price performance over the past 12 months.
And overall performance of BRZE stock is strong, with its IBD Composite Rating coming in at 92 out of 99.
Earnings are its Achilles' heel, with the stock yet to turn a profit. In addition, it boasts a poor EPS Rating of 55 out of 99. This is perhaps no surprise given the firm went public in November 2021.
But that hasn't scared off Wall Street firms from investing in the company. It currently holds an Accumulation/Distribution Rating of A, which reflects heavy recent buying among institutions.
Noteworthy holders include the Invesco Discovery Fund, a top-rated fund, according to IBD research. In total, 38% of its stock is currently held by funds, according to MarketSmith data.
Analysts Rate Braze
Wall Street analysts currently are bullish on BRZE stock, with its average price target coming in at just shy of 56, according to Barron's.
William Blair analyst Arjun Bhatia rates Braze stock as outperform. He pointed out the freshness of their offerings compared with older players in the marketing space.
"Over the past couple years, marketing departments have been going through a refresh of marketing technology stack, leading to customers transitioning from legacy marketing clouds to more modern vendors like Braze," he said in a recent note to clients.
He said the firm is winning share from the likes of Oracle and Salesforce. Bhatia also believes the firm is a "leader in its category with a defensible, competitive moat."
Oppenheimer managing director Brian Schwartz rates Braze stock as outperform with a 52 target.
"Braze is the premier best-of-breed customer engagement supplier in the market, and the business looks set to reaccelerate in 2024 if planning horizons lengthen and/or the macro stabilizes," he said in a recent note.
Please follow Michael Larkin on X, formerly known as Twitter, at @IBD_MLarkin for more analysis of growth stocks.
