Braze stock is Monday's IBD 50 Stocks To Watch pick as the artificial intelligence player sits in a buy zone out of a cup-with-handle base. The AI stock hit a 52-week high on Monday.
The company's AI-based Sage platform uses behavior-based automation and predictive tools to collect customer data, build user profiles, identify target customers and make customer predictions. It also uses AI in its reports and analytics.
Braze partners with Amazon.com in its Amazon Simple Storage Service data storage and retrieval service. The company engages 6 billion monthly active users with more than 1,900 brands in over 70 countries. It reaches customers through mediums including email, mobile app messaging and texts.
AI Stock In Buy Zone
Braze stock is in the buy zone of a cup-with-handle base with a 57.59 entry stretching to 60.47, according to MarketSmith pattern recognition. The base is within a stage two base-on-base formation with a 58.67 entry and a buy zone up to 61.60.
The AI stock broke out of the prior base with a 50.13 buy point in mid-November. It ran up to a high before sinking 3.4% in heavy volume, following the company's earnings report on Dec. 6.
The plunge started forming the second base as the stock deteriorated below its 50-day moving average Jan. 3. Shares retook the line on Jan. 10, after Oppenheimer raised its price target on the stock to 75 from 66 and reiterated its outperform rating.
Braze stock reached a 52-week high on Monday. The AI stock is trading around 61 but still not back to its Nov. 17, 2021, initial public offering price of 65. And the stock has a ways to go to its all-time high of 98.78 reached on Nov. 22, 2021.
Losses Getting Smaller
On Dec. 6, Braze reported a smaller-than-expected quarterly loss and higher sales for its fiscal third quarter that ended Oct. 31. Its loss of 5 cents a share improved from the 15-cent deficit in the prior year's quarter. And its quarterly losses are trending smaller.
The company's sales growth has ranged from 31% to 33% in the last three quarters. In addition, its gross margins also improved compared to last year's quarter.
"We are confidently on track to meet our profitability targets for the fourth quarter of fiscal 2024 and for fiscal 2025," said Bill Magnuson, co-founder and chief executive of Braze.
Braze updated its fiscal fourth-quarter and fiscal 2024 guidance with smaller losses and higher revenue than previously guided on Sept. 7. Both sales and bottom-line numbers exceeded estimates among analysts for the AI stock.
Mutual funds have taken notice of the stock, with 357 owning shares in December, up from 304 in September and 244 in June. Its Accumulation/Distribution Rating of A- indicates fairly heavy institutional buying over the last 13 weeks.
The AI stock boasts a 94 out of 99 IBD Composite Rating and a 95 Relative Strength Rating. Meanwhile, it holds a mediocre 62 EPS Rating because it is not yet profitable.
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