TD Cowen Downgrades Braze Inc (BRZE) to Hold

TD Cowen analyst Derrick Wood downgraded Braze Inc (NASDAQ: BRZE) from Buy to Hold with a price target of $47.50 (from $36.00).

The analyst comments: “We are downgrading BRZE to hold following the proposed acquisition by CRM, and raising our PT to $47.50 (~5.3x EV/CY27E Sales), in line with the proposed acquisition price. CRM signed a definitive agreement to acquire BRZE for ~$5.66b in EV, marking a ~58% premium to prior day closing price. Likely was a competitive process. FY28 expected close. We see relatively low antitrust risk.

CRM has signed a definitive agreement to acquire BRZE for ~$5.66b in EV or $47.50/ share. The announced deal represents ~6.2x EV/CY26E Sales on $913m (+22% organic) and ~5.3x EV/CY27E Sales on $1.07b (+17%), above its mid-cap peer group at ~5.6x and ~4.9x, respectively. We note the EV/TTM Sales multiple of ~6.8x is higher than what CRM paid for INFA (~5.1x), which had a much lower growth profile, but below ~2025 M&A in the enterprise software space incl. HCP (~11x TTM) and CFLT (~10x TTM). While the proxy statement is not yet released, we expect it to include a competitive bidding process from other strategics (i.e., ADBE) given the ~58% premium to BRZE's unaffected closing price on 10/19. We see positive implications for close peer KVYO (stock up +12%), noting 1) shares trade at ~2.9x EV/ CY27E Sales (against 19% growth) and 2) we've seen M&A domino effects in MarTech in past consolidation cycles.”

For an analyst ratings summary and ratings history on Braze Inc click here. For more ratings news on Braze Inc click here.

Shares of Braze Inc closed at $45.57 yesterday.

You May Also Be Interested In

• SAP (SAP:GR) (SAP) PT Raised to EUR220 at Piper Sandler
• Meta Platforms Inc. (META) PT Raised to $905 at KeyBanc; 'Revenue and AI Momentum Support the Investment'
• Texas Capital Bancshares (TCBI) PT Lowered to $105 at DA Davidson