Asana Poised For Growth: Analyst Highlights Superiority, Market Potential, And Cash Flow Upside - Asana (NYSE:ASAN)

JMP Securities analyst Joe Goodwin reiterates Asana Inc ASAN with a Market Outperform and a $28 price target.
The analyst re-rated ahead of hosting several investor meetings with CFO Tim Wan and Head of IR Catherine Buan after the stock has risen 42% YTD versus the Nasdaq's 15%.
Goodwin proposes to discuss the tone of business, Asana's path to profitability after improving its operating margin, the continued emphasis on enterprise accounts, CEO Dustin Moskovitz's insider buying, takeaways and new product announcements from Asana Forward last week and competition, including from ChatGPT and other generative AI offerings.
The analyst views that Asana has product superiority in the enterprise, supported by its growth rate in the $5K plus category of 46% this quarter (compared to only 8% in the under $5K category).
The analyst flags that Asana addresses a large TAM, estimated to be $50.7 billion by 2025.
Asana is on track to be FCF positive at some point before the end of FY2024, the analyst highlights.
The analyst also highlights that CEO Moskovitz has purchased nearly 60 million company shares since September 2022, demonstrating his faith in the company and removing doubt surrounding Asana's liquidity.
Goodwin maintains his FY24 non-GAAP EPS estimate of ($0.56) (consensus ($0.56)) on revenue growth of 18% and FY25 non-GAAP EPS estimate of ($0.38) (consensus ($0.34)) on revenue growth of 20%.
Asana currently trades at a CY24E EV/revenue multiple of 5.3x, while the analyst's $28 price target implies a multiple of 7.9x, roughly in line with the peer group.
Price Action: ASAN shares traded higher by 0.05% at $19.55 on the last check Thursday.

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