Braze, Inc. (BRZE) reports third-quarter loss, highest revenue estimates

Braze, Inc. (BRZE) reported quarterly loss of $0.15 per share versus the Zacks Consensus Estimate of a loss of $0.23. For comparison, a year earlier the loss was $0.16 per share. These numbers have been adjusted for one-off items.

This quarterly report presented an earnings surprise of 34.78%. A quarter ago, it was expected that this company would post a loss of $0.20 per share when it actually produced a loss of $0.16, delivering a surprise of 20%.

The company has topped consensus EPS estimates four times over the last four quarters.

Braze, Inc., which belongs to the Zacks Technology Services industry, posted revenues of $93.13 million for the quarter ended October 2022, surpassing the Zacks Consensus Estimate by 2.95%. For comparison, revenues from a year ago amounted to $63.97 million. The company has topped consensus revenue estimates four times over the last four quarters.

The sustainability of the immediate share price movement based on the recently-released numbers and future earnings expectations will mostly depend on management’s commentary on the earnings call.

Braze, Inc. Stock have lost approximately 63.4% since the beginning of the year compared to the S&P 500 Index’s decline of -16.3%.

What’s next for Braze, Inc.

Although Braze Inc. has underperformed the market this year, the question that arises for investors is: what’s next for the stock?

There are no simple answers to this key question, but one reliable measure that can help investors address this issue is the company’s earnings prospects. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Leading up to the earnings release, the estimate revision trend for Braze, Inc. is mixed. While the magnitude and direction of estimate revisions may change following the company’s just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) stock. Therefore, the company’s stock is expected to perform in line with the market in the near future. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the next quarters and the current fiscal year change in the coming days. The current consensus EPS estimate is -$0.20 on revenue of $94.28M for the coming quarter and -$0.78 on revenue of $348.55M for the current fiscal year.

Investors should be aware that the outlook for the industry may also have a significant impact on share prices. In terms of the Zacks Industry Rank, Technology Services is currently in the bottom 46% of over 250 Zacks industries. Our research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

CleanSpark (CLSK), another company in the same industry, is yet to release results for the quarter ending September 2022. The results are expected to be released on December 14.

The company is expected to report quarterly loss of $0.40 per share in its upcoming report, representing a year-over-year change of -322.2%. The consensus EPS estimate for the quarter has not changed over the last 30 days.

CleanSpark revenue is expected to be $24.3 million, down 10.5% from the same quarter last year.

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