3 Asana Analysts On Earnings: Better Than Expected, But 'Continued Deceleration And More Macro Headwinds To Surface'

Zinger Key Points
  • Concerns around Asana's solvency are "off the table for now," an analyst said.
  • Asana's revenue guidance was raised "despite macro uncertainty,” another analyst added.

Shares of Asana Inc ASAN spiked in Wednesday's after-hours session after the company reported better-than-expected quarterly results and raised its revenue guidance for the fiscal year.

RBC Capital Markets On Asana

Analyst Rishi Jaluria reiterated an Underperform rating while raising the price target from $13 to $15.

“ASAN reported a mixed quarter overshadowed by a $350M private placement by CEO Dustin Moskovitz leading shares up 21% AMC,” Jaluria said in a note.

While the issue of the shares does take the “concerns on cash burn/solvency off the table for now,” the timing of the purchase and announcement is “somewhat curious,” he added.

“We were surprised by commentary given what other software vendors have said, and we expect headwinds to worsen (especially with deteriorating macro) owing to the relatively discretionary nature of work management software,” the analyst further wrote.

Check out other analyst stock ratings.

Morgan Stanley On Asana

Analyst Keith Weiss reaffirmed an Equal-Weight rating and a price target of $35.

Asana’s results were “solid” and the capital raise puts an end to liquidity concerns, Weiss said in a note.

“Top-line outperformance continued into Q2, although billings and revenue growth decelerated. FY23 revenue guidance moved slightly higher (~45% at the high-end vs. ~43% prior) despite macro uncertainty,” the analyst wrote.

He expects “continued deceleration and more macro headwinds to surface” in the back half of the year.

JMP Securities On Asana

Analyst Patrick Walravens maintained a Market Outperform rating and a price target of $43.

Asana’s quarterly results were better than expected, Walravens mentioned in a note. The company has “product superiority, particularly in the enterprise,” and has a large addressable market of around $50.7 billion by 2025, the analyst said.

The combination of high growth and more disciplined spending “should enable Asana to attain positive free cash flow by the end of calendar year 2024,” he added.

ASAN Price Action: Shares of Asana had climbed 24.53% to $23.71 at the time of publication Thursday.

Photo: Courtesy Asana

Posted In: JMP SecuritiesKeith WeissMorgan StanleyPatrick WalravensRBC Capital MarketsRishi JaluriaAnalyst ColorEarningsNewsPrice TargetReiterationAnalyst RatingsMoversTechTrading Ideas