Shares of the workflow management platform provider Asana (ASAN) are on fire, having risen about 332% this year. Further, its stock has gained over 432% in one year.
The stellar growth in Asana stock is backed by the acceleration in its revenue growth rate, growing enterprise customer base (customers spending $50K or more annually), and higher dollar-based net retention rate (DBNRR).
It’s interesting to note that Asana delivered revenue growth of 55%, 57%, 61%, and 72% in the last four consecutive quarters. Meanwhile, its enterprise customer base more than doubled, to 598, during the last reported quarter.
Asana’s overall DBNRR was more than 118% in Q2. Meanwhile, for enterprise customers, it stood at 145%.
Thanks to its robust financial performance and guidance raise, investors maintain a favorable outlook on Asana stock. TipRanks’ Stock Investors tool shows that investors holding portfolios on TipRanks maintain a Very Positive outlook on Asana stock, with 29.9% of these investors increasing their exposure in the last 30 days.
Alongside investors, its CEO, Dustin Moskovitz, has been lapping up Asana stock. Per an SEC filing, Moskovitz bought 500,000 shares of Asana in the first week of October 2021.
Taking a note of this, Jefferies analyst Brent Thill highlighted that in aggregate, Moskovitz bought 4.1M Asana stock in the last four months.
See Asana Insider Trading on TipRanks >>
In general, the significant purchase of a company’s stock by its CEO is a strong indication of solid future growth prospects.
However, Wall Street’s Q3 estimates suggest that Asana’s revenue growth rate could decelerate. Analysts expect Asana to post revenues of $93.73 million in Q3, reflecting year-over-year growth of about 59%, but much lower than the 72% growth registered in Q2.
Nevertheless, its large addressable market, continued growth in enterprise customer base, and lower churn support my Bullish view.
Meanwhile, On TipRanks, Asana is a Strong Buy, based on 8 Buys and 1 Hold. However, the average Asana price target of $97.22 implies approximately 23.8% 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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