Braze (BRZE) Upgraded to Strong Buy: Here's What You Should Know

Zacks Rank Upgrade and Earnings Estimate Revisions - Braze Inc (BRZE) has been upgraded to a Zacks Rank 1 (Strong Buy), reflecting an upward trend in earnings estimates, which is a powerful force impacting stock prices [1] - The Zacks rating system tracks the Zacks Consensus Estimate, which is the consensus measure of EPS estimates from sell-side analysts covering the stock for the current and following years [1] - The upgrade to a Zacks Rank 1 positions Braze in the top 5% of Zacks-covered stocks in terms of estimate revisions, indicating potential for market-beating returns in the near term [10] Earnings Estimate Revisions for Braze - For the fiscal year ending January 2025, Braze is expected to earn $0 07 per share, representing a 128% change from the year-ago reported number [8] - Over the past three months, the Zacks Consensus Estimate for Braze has increased by 15 5%, indicating steady upward revisions by analysts [8] Correlation Between Earnings Estimates and Stock Price Movements - Changes in a company's future earnings potential, as reflected in earnings estimate revisions, are strongly correlated with near-term stock price movements [4] - Institutional investors use earnings and earnings estimates to calculate the fair value of a company's shares, and their bulk investment actions lead to price movements [4] - Empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock movements, making it rewarding to track such revisions for investment decisions [6] Zacks Rank System Overview - The Zacks Rank stock-rating system uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank 1 (Strong Buy) to Zacks Rank 5 (Strong Sell) [7] - Zacks Rank 1 stocks have generated an average annual return of +25% since 1988, demonstrating the system's impressive track record [7] - The Zacks rating system maintains an equal proportion of 'buy' and 'sell' ratings for its universe of over 4000 stocks, with only the top 5% receiving a 'Strong Buy' rating [9]