ASAN - Why Asana Stock Dropped 24% in December
Shares of work-management software company Asana (NYSE: ASAN) dropped 24.2% in December, according to data provided by S&P Global Market Intelligence . Practically the entirety of the drop came in the month's early days, when the company reported financial results for the third quarter of its fiscal 2023. Downbeat analyst commentary followed, sending the stock careening to all-time lows.
In Q3, Asana generated revenue of $141 million, up 41% year over year and well ahead of management's guidance for $139.5 million. There are positive aspects to this revenue number that I'll highlight in a moment. But the problem is that Asana's business is slowing down, leading to layoffs.
For perspective, Asana grew revenue by 67% in fiscal 2022. And management went on a hiring spree, expecting the winds to continue blowing in its sails. However, in Q3, management talked about the deceleration in business trends and said, "Our current expectation is that these factors will persist through the fourth quarter and into the next fiscal year."
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Why Asana Stock Dropped 24% in December