Asana (ASAN) Delivers Beat-and-Raise to Send Shares 10% Higher in Pre-Open, Analysts Bulled-up
Shares of Asana (NYSE: ASAN) are up about 10% in pre-open Thursday after the company delivered a beat-and-raise quarter.
Asana reported Q2 EPS of negative $0.23 to top the analyst estimate of negative $0.26. Revenue for the quarter came in at $89.5 million versus the consensus estimate of $82.31 million.
“In the second quarter we accelerated total revenue growth, continued to report strong customer growth and increased dollar-based net retention rates across the board," said Dustin Moskovitz, co-founder and chief executive officer of Asana.
“Customers are adopting Asana everywhere: across our major geographies and across all sizes of teams. We saw particular strength in the enterprise, with the number of customers spending over $50,000 up 111 percent. Stay tuned for more enterprise announcements in October."
For the current quarter, ASAN projects EPS in the range of negative $0.27 to negative $0.26 versus the consensus of negative $0.28. Asana sees revenue of $93 million to $94 million versus the consensus of $86.7 million.
RBC analyst Rishi Jaluria raised the price target on the Sector Perform-rated ASAN to $77.00 per share from $75.00 after a “solid beat-and-raise F2Q.”
“ASAN reported a solid beat-and-raise F2Q, leading shares up 1% in the aftermarket. We would highlight a number of points on business health including an acceleration of large customer net adds and improved DBNER rates. We are increasing our revenue estimates and price target but maintain our SP rating on concerns around competition, TAM, and valuation,” Jaluria said in a note.
Wolfe analyst Alex Zukin reiterated an Outperform rating after witnessing “another very strong quarter” from ASAN. The price target goes to $87.00 per share from the prior $75.00.
“Looking ahead, we’d note that comps do get tougher in the second half (the billings comp in 3Q is ~8pp tougher than in 2Q), but commentary on the call does not suggest any fundamental slowdown of the business. The company feels very good about seat growth in the business and is roughly split on seats vs. price as incremental growth drivers. We remain conservative in our forecasting for billings with 49% growth in billings for 3Q and 45% in 4Q. Revenue guidance for the year was increased $20M (vs. +$25M following the 1Q report) and calls for growth of ~58% Y/Y at the midpoint,” Zukin wrote in a note sent to clients.
“We have increased our base case estimates for CY22 and CY23 to $489M and $659M respectively with 36% and 35% growth rates for each year, respectively. We also raised our upside case which now calls for growth of 46% in CY22 & CY23 or 11%/21% upside to our new base case estimates. While the stock is clearly trading at a premium valuation, we see no reason why this can’t become one of the largest software companies and categories over time and therefore continue to be very positive on the story,” the analyst added.