ASAN - Asana Remains A Solid Long-Term Investment

2024-03-15 13:01:11 ET

Summary

• Asana's recent earnings results led to a stock sell-off, but the work management space is still a nascent market with potential for revenue growth.
• The company is successfully improving profitability and has a high gross margin of 90.1%, indicating potential for leverage as revenue scales.
• Despite a slowdown in growth, Asana's valuation at just 5x P/S is favorable for patient investors, and the stock could deliver double-digit returns over time.
• If Asana succeeds in reaccelerating revenue in H2, then investors could benefit from both the increase in revenue/growth and the higher valuation that might result in.

Investment Thesis

Asana ( ASAN ) sold off after its recent earnings results based on tepid FY guidance, which calls for a further slowdown. Nevertheless, the work management space remains a relatively nascent market opportunity, and the company has the explicit goal to reaccelerate revenue this year. Meanwhile, the company is successfully executing on improving its profitability....

For further details see: