Today’s professional teams are facing an impact gap. That’s the problem that workforce-management software company Asana (NYSE:ASAN) is trying to solve. If you like the idea of tech-infused workplace reform then you might consider ASAN stock.
Anyone who has spent a lot of time in traditional work spaces will probably know the common problems. Believe it or not, 40% of workers’ time is spent doing strategic work, while a whopping 60% is wasted on “work about work” or busywork.
Asana observed that the existing workplace tools don’t really remedy these issues. Spreadsheets don’t scale, vertical solutions aren’t flexible and — let’s be honest here — emails get ignored.
However, where there are problems, there are also opportunities. Asana is working diligently on the leading edge of modern workplace-efficiency software. As we’ll see, business has been absolutely spectacular in this niche.
ASAN Stock at a Glance
Until the middle of May, ASAN stock was stuck around $30 and tested the shareholders’ patience with lateral movement. Yet, the loyal investors were rewarded as a major moonshot happened. Clearly, the short-sellers had to run for cover as the buyers took complete control of the stock’s price action.
In a breathtaking rally, ASAN stock ran all the way up to a 52-week high of $145.79 on Nov. 15. Unfortunately, that swift move wasn’t sustainable, and a retracement was practically inevitable.
Apparently, a combination of the emergence of the omicron Covid-19 variant, along with a late November rise in 10-year U.S. Treasury bond yields, sent high-growth stocks lower. ASAN stock was among that hard-hit group of stocks. That’s not a bad thing if you’ve been waiting on the sidelines, though, as now you may be able to grab some shares at an attractive price.
Changing the Workplace
Impressively, Asana operates in 190 countries worldwide while seeking to capture a total addressable market valued at $50 billion-plus. To serve this market, Asana offers a software-as-a-service (SaaS) platform which solves a wide variety of problems. This platform facilitates customer onboarding, product launches, event planning, training and implementation, vendor management, and more.
The company leverages a subscription-based business model, which captures strong gross margins of 91%. For at least a year, Asana’s gross margins have remained above 86%.
Just as importantly, Asana is changing the workplace as we know it. Reportedly, the company is helping workers to spend less time on emails, “saving more than 3 hours of additional time per week per daily Asana user.”
Record User Adoption
Investors, will naturally want to know if Asana’s SaaS tools can provide a reliable stream. In other words, does all of Asana’s workplace reform translate to strong revenue growth?
The answer is definitely yes. As Asana co-founder and Chief Executive Officer Dustin Moskovitz put it, 2021’s third quarter proved to be “another strong quarter, led by record user adoption and large enterprise wins” for his company.
During that quarter, Asana exceeded two million paid seats and evidently landed bigger customers. Indeed, the revenues from customers spending $5,000 or more on an annualized basis increased by 96% year-over-year.
Not only that, but the company’s total revenues during the third quarter of 2021 were $100.3 million, representing a 70% year-over-year improvement.
Furthermore, it’s crystal-clear that Asana’s customer base is expanding rapidly, as the company’s total number of paying customers grew by 7,000, ending the third quarter with over 114,000.
The Takeaway for ASAN Stock
When workers are empowered by technology to do their jobs more efficiently, all stakeholders can benefit. This includes folks who hold ASAN stock, as Asana’s growth should soon be reflected in the share price.
In the meantime, feel free to consider a long position as Asana builds its user base and demonstrates robust revenue growth.
ASAN stock currently gets a grade of “B” in my Portfolio Grader.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
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