ASAN - Asana stock surges as Baird praises 'meaningful' improvement in profitability

2023-03-09 13:21:48 ET

Asana ( NYSE: ASAN ) shares surged more than 20% on Thursday as investment firm Baird praised the work management company for its strong fourth-quarter results and CEO Dustin Moskovitz's plan to purchase 30M shares.

Analyst Rob Oliver, who has a neutral rating on Asana ( ASAN ) shares, said the company is seeing continued traction in the enterprise and despite worries about the global economy, it saw an increase in multi-year commitments.

"Continued to see longer sales cycles and increased budget scrutiny; also saw increase in multi-year deals and benefited from vendor consolidation," Oliver, who raised his per-share price target to $20 from $15 wrote in an investor note.

During the quarter, Asana ( ASAN ) said it added roughly 4,000 net new customers, topping estimates. Customers paying more than $100,000 in annual contract value was 506, up 49% year-over-year.

Looking ahead, Asana ( ASAN ) said it expects revenue to be between $638M and $648M, slightly below analysts expectations, but the company is focused on increasing the average productivity of sales reps by 20% towards the end of the second-half of 2024 and the company reiterated its target of achieving positive free cash flow by the end of next year.

In addition, Moskovitz said he had entered into a 10b5-1 trading to plan to buy 30M additional shares as he believes they are "undervalued." The plans tarts on June 8 and ends on December 29.

Earlier this month, investment firm D.A. Davison upgraded Asana ( ASAN ), citing recent app data that showed continued growth in active users and a "marked acceleration in downloads."

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