To put it simply, workforce-management software company Asana (NYSE:ASAN) is in the business of reducing the impact gap in the typical workplace. It’s an important concept in the Covid-19-influenced “new normal,” and prospective ASAN stock investors should understand just how important Asana could be in the coming years.
Unfortunately, “40% of workers’ time is spent doing strategic work, while a whopping 60% is wasted on “work about work” or busywork.” Whether it’s on-site or remote work, people are spending too much time doing duplicative tasks, attending unnecessary meetings and engaging in inefficient back-and-forth messaging.
Asana’s tech tools can help to solve the problems of team coordination. For example, Asana’s typically spend 33% less time on emails. They’re 42% faster in executing business processes, according to Asana.
Those are numbers that any smart business can get behind. Yet, not every market trader is getting behind ASAN stock, as the share price has pulled back sharply. That’s not a problem, though, as contrarian investors can seize the opportunity to pick up shares at a nice discount.
ASAN Stock at a Glance
Despite the stock-price drawdown, folks who invested in Asana actually had a good year in 2021. In fact, they enjoyed outstanding gains as the stock ran up from $28 to $145 before the sellers showed up.
The big correction took place in November and December as ASAN stock fell to the $65 area. The worst of the drawdown might be over, though, as the share price was still near that price level in early January of 2022.
When the going gets rough, it’s a good idea to take a long-term view and try to get some perspective. Sometimes, pullbacks can be healthy and necessary for growth stocks.
Bear in mind that ASAN stock has posted exceptional gains since Asana’s initial public offering (IPO) from September 2020. Back then, the stock’s reference price was set at just $21.
Therefore, level-headed traders can view the stock’s drawdown as probably temporary, and necessary for sustainable future gains.
Big Revenues from Big Customers
Given the recent pullback in the Asana share price, you might be led to assume that the company isn’t doing well financially.
However, Asana is actually making significant progress. Apparently, businesses need Asana’s team management platform, and they’re willing to pay for it.
There’s plenty of data points to support this claim. During 2021’s Asana’s third-quarter of fiscal 2022, the company’s total number of paying customers grew by 7,000. By the quarter’s end, the running total exceeded 114,000.
Furthermore, there were some big-ticket clients in the mix. Specifically, the number of customers spending $50,000 or more on an annualized basis advanced to 739, for a 132% year-over-year increase.
As a result, Asana’s quarterly revenue surpassed the $100 million milestone. To be more precise, the revenue was $100.3 million, representing an increase of 70% year-over-year.
Analyst Is Bullish, CEO Is Buying
Given all of that positive financial data, we might conclude that ASAN stock is a good value at its current, reduced price.
For his part, Piper Sandler analyst Brent Bracelin seems to envision higher share prices. He gave Asana an “overweight” rating, and even went so far as to hike his share-price target from $85 to $140.
Bracelin’s bracing for a rally in ASAN stock due to Asana’s “high growth model that is still in the nascent stages of adoption.” This is a sensible viewpoint since, as we’ve discussed, Asana’s client count is expanding rapidly.
Meanwhile, Bracelin apparently isn’t the only individual who’s confident in the company and its stock. Showing supreme confidence, Asana President and CEO Dustin A. Moskovitz reportedly purchased 1,250,000 shares of his company’s stock on Dec. 22, 2021.
The total cost of that purchase was $97.2 million. Now, that’s what you might call having skin in the game.
The Takeaway
Will ASAN stock reach Bracelin’s price target of $140? Only time will tell, of course.
The outlook seems positive, though, as Asana’s on the right trajectory with a recent increase in high-paying clients.
Besides, the share-price drawdown may have been necessary in order to sustain a longer-term rally — and to give enterprising investors a chance to buy the stock at a discount.
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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