Cloud-based software company Braze (NASDAQ: BRZE) made its debut on the public markets on Wednesday and investors can’t seem to get enough of it. Shares in the company were originally set at $65 per share but opened up 34% higher at $87.20 as investors clamored to get a piece of the firm.
The share price closed the day at $93.39, representing more than a 43% jump from the initial price. Braze is now valued at over $8 billion following its majorly successful IPO. Let’s take a closer look at some of the details, shall we?
Why does this matter to investors?
Braze markets itself as a customer engagement platform for businesses to utilize to leverage existing customer information. To put it simply, it lets businesses understand their customers better. Importantly, Braze makes use of the first-party information that these companies have on their customers. This matters hugely, as we’ve already seen how the typical practice of relying on third-party customer data has backfired on some huge companies following Apple’s notorious iOS 14.5 update.
Braze had over 1,000 customers signed up as of July this year, with these customers encompassing a network of monthly active users numbering over 3 billion. With regards to revenue the company has reported year-over-year (YoY) growth of 56%. CEO Bill Magnuson was bullish on future growth as he remarked that “we will continue to expand the company to take advantage of the huge addressable market.”
Potential investors should take note, however, of the current wave of investor interest in the software and technology industries. A waft of strong debuting companies has caught the attention of Wall Street and there’s every chance that some companies could simply get caught in the tide despite not having the strong underlying potential that’s typically sought after.
So, should I invest in Braze stock?
Braze offers investors a brilliant opportunity to capitalize on the changing trends in the digital ad industry. With the move away from third-party advertising happening swiftly, the company looks set to reap the benefits of a new reliance on first-party data.
Investors should still apply caution and thought when considering the stock, however. Here at MyWallSt, we like to wait for at least two quarterly earnings reports to be released before we even begin to consider a stock. We’d urge you to do the same, as much of Braze’s potential will rely on its underlying financials.
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Financial Writer at MyWallSt
Pádraig’s favorite stock is Nike. Growing up as a sports fanatic, seeing Nike collaborate with athletes like Jordan, Lebron, and Ronaldo inspired him and cemented the brand in his mind. Now, despite having failed miserably in his attempts to earn a fabled Nike sponsorship, he still believes in the innovation and creativity behind Nike and is convinced they will only grow stronger as the world's leading sports brand.