Asana's Stock Tanks After Q2: 5 Analysts Look At What Happened, Outlook

Shares of Asana Inc (NYSE: ASAN) plummeted in trading on Wednesday, after recording losses with other stocks in the pre-market.

The results came amid an exciting earnings season. Here are some key analyst takeaways from Asana’s earnings release.

Piper Sandler On Asana

Analyst Brent Bracelin maintained a Neutral rating and price target of $24.

“Outsized exposure to the software and technology vertical (30% of sales) where layoffs and cost containment remained a growth drag resulted in the eighth quarter of moderating top-line growth,” Bracelin wrote in a note.

Although Asana did beat top-line estimates, “the macro environment and renewal timing that lags layoffs” could result in its revenue growth slowing to the low-to-mid-teens in the back half of the year, the analyst stated. He added that the company’s cost containment efforts and large deal collections were impressive.

Oppenheimer On Asana

Analyst George Iwanyc reiterated an Outperform rating and price target of $28.

Asana managed to report its fiscal second-quarter results ahead of expectations, driven by better international execution and tight cost discipline, Iwanyc said.

“We're encouraged to see recent sales adjustments in EMEA start to show results with enterprise/large accounts gains,” the analyst wrote. Asana could make similar improvements in the U.S. over the next several quarters, as “new CRO makes sales/GTM adjustments and as new AI features and product packaging roll-out,” he added.

Check out other analyst stock ratings.

JMP Securities On Asana

Analyst Patrick Walravens maintained a Market Outperform rating and price target of $30.

Although Asana’s revenue growth decelerated on a year-on-year basis to 20%, the sequential revenue growth was much better than in the last quarter, Walravens said.

“Asana offers a differentiated solution for work management in the enterprise and is well suited for augmentation by Asana Intelligence, with AI solutions being rolled out at an event in October,” the analyst wrote. “The company has done an excellent job getting its costs under control,” he added.

RBC Capital Markets On Asana

Analyst Rishi Jaluria reiterated an Underperform rating and price target of $10.

Asana’s results were “mixed,” as “revenue growth decelerated another ~600 bps and leading indicators were weak, particularly billings and NRR,” Jaluria said in a note.

“Additionally, FY24 guidance was raised by less than Q2's beat, effectively lowering the Q4 outlook and implying an exit growth rate of just 11% YoY,” he added.

KeyBanc Capital Markets On Asana

Analyst Jason Celino reaffirmed a Sector Weight rating.

Asana’s billings growth was below expectations and its overall NDR (net dollar retention) continued to decline, as the company “continues to work through macro pressures and customer downgrade activity,” Celino said in a note.

“Asana is essentially leaving its FY24 revenue guidance unchanged and is raising its OM guidance meaningfully higher,” he added.

ASAN Price Action: Shares of Asana had declined by 12.94% to $18.84 at the time of publication Wednesday.