Asana (ASAN) shareholders are a happy bunch, as the shares of this workflow management software company have rallied about 257% this year. Strong revenue trends, rapid customer acquisition, and a high retention rate are some of the factors behind this rally.
Along with the noteworthy appreciation in Asana, stock investors’ optimism remains high. TipRanks’ Stock Investors tool indicates that investors who hold portfolios on TipRanks maintain a Very Positive outlook on Asana stock, with 63.7% of these investors increasing their exposure in the last 30 days.
Equally bullish on Asana is the company’s CEO, Dustin Moskovitz.
As per the recent SEC (U.S. Securities and Exchange Commission) filing, Moskovitz bought 500,000 shares of Asana stock over the past week. Brent Thill of Jefferies highlighted that “Moskovitz bought an incremental 500k shares or $50M in the past week which was the first time he has bought after a 3 week break. This brings his total purchased to 4.1M shares or $268M in the past 4 months.”
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Thill noted that largely, each tranche of Moskovitz share purchases has been bought at a higher price. According to the analyst, that signals “future confidence in the business which is a great indicator of sustainable results given ASAN has accelerated rev (revenue) in 3 straight Qs (quarters) and only has approx 1.5M paid users in a market with 1.25B knowledge workers.”
Undoubtedly, Asana has been growing rapidly through its fast acquisition of customers. Its number of total paying customers increased to 107,000 in Q2 from 82,000 in the prior-year period. Meanwhile, the number of customers paying more than $50K annually has more than doubled, to 598.
Asana’s dollar-based net retention rate stands at 118%, while it expects its TAM (total addressable market) to reach $50.47 billion by 2025, indicating strong opportunities. Thanks to its strong growth in its enterprise customer base and expansion of TAM, I maintain a bullish outlook on Asana stock.
Similarly bullish, Thill has a Buy rating on Asana stock with a price target of $115, implying 9.1% upside potential.
Overall, Wall Street is optimistic on ASAN stock, with an analyst rating consensus of Strong Buy, based on 9 Buys and 1 Hold.
Furthermore, Asana scores a 9 out of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.
Meanwhile, the average Asana price target of $90 implies 14.7% downside potential to current levels.
Disclosure: On the date of publication, Amit Singh had no position in any of the companies discussed in this article.
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