ASAN - Asana: A Good Company but Not a Great Stock
2023-07-25 08:20:00 ET
Asana 's (NYSE: ASAN) stock price has dropped significantly since the end of 2021 for several reasons, including the broader sell-off of growth stocks. Investors expect growth companies to increase revenue rapidly in the hopes of these businesses turning profitable sooner than later. However, growth stocks have been under pressure throughout 2022, as many companies' revenue growth -- and in some cases, revenue itself -- fell off a cliff, while costs continued to escalate in an inflationary environment squeezing margins.
Investors, as a result, generally sold off growth stocks as they became more cautious about the outlook for the economy and individual businesses. For instance, Asana's stock dropped 82% in 2022. Yikes!
Although many investors anticipate global economic growth rebounding in 2024 and 2025 and are optimistic about the prospects for many other growth companies, most Street analysts have shown little enthusiasm for this company and rate it as a hold. Here's why I think they are right.
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Asana: A Good Company, but Not a Great Stock