Asana (ASAN) stock hit with two downgrades after earnings; shares tumble 18%

December 2, 2022 5:42 AM EST
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Price: $15.54 +6.80%

Rating Summary:
    5 Buy, 8 Hold, 3 Sell

Rating Trend: Up Up

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    Up: 15 | Down: 21 | New: 16
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Shares of Asana (NYSE: ASAN) are down almost 18% after the company reported mixed results and cut its full-year forecast.

Asana reported an adjusted Q3 loss per share of $0.26 on revenue of $141.4 million, topping estimates for a loss of $0.33 on revenue of $139.0M. For this quarter, Asana said it expects to generate revenue between $144M and $146M, missing the $151.1M consensus. The adjusted loss per share is seen at $0.28-0.27, again worse than the expected loss of $0.29 per share.

On a full-year basis, Asana lowered its forecast to a range of $541-543M from $544-547M and below the 545.6M guidance. The outlook for an adjusted loss per share ranges between $1.15 and $1.14, much worse than the estimated loss per share of $1.25.

In response to “mixed” results and a guide down, analysts at Piper Sandler and Baird lowered their ratings on the ASAN stock. Piper Sandler analyst Brent Bracelin slashed the rating to Neutral from Overweight with a $16 per share price target (down from $24), citing limited visibility.

“ASAN appears to be entering a potential 6-9 month digestion period as tech unicorns and digital natives pause faster than it can diversify into non-tech verticals. Slowing growth, payment timing shifts at large enterprise customers, and high-cost structure could elevate quarterly cash burn volatility even after the restructuring. That said, we plan to closely monitor how quickly ASAN can diversify the customer base while improving bottom-line efficiency,” Bracelin said in a client note.

JMP analyst Patrick Walravens cut the price target to $28 per share (from $43) to reflect lowered guidance. Still, he reiterated a Market Outperform rating and continues “to like this idea into 2023 for a number of reasons.”

Asana shares were down over 75% year-to-date going into earnings.

By Senad Karaahmetovic

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