S&P 500   4,594.62
DOW   34,899.34
QQQ   391.20
S&P 500   4,594.62
DOW   34,899.34
QQQ   391.20
S&P 500   4,594.62
DOW   34,899.34
QQQ   391.20
S&P 500   4,594.62
DOW   34,899.34
QQQ   391.20

One Year After IPO, Asana Shows Outstanding Price & Revenue Strength

Thursday, September 30, 2021 | Kate Stalter
One Year After IPO, Asana Shows Outstanding Price & Revenue StrengthCloud-based project management software Asana (NYSE: ASAN) celebrates one year as a public company on September 30. Since making its debut, priced at $21, shares are up more than 400%.

The stock tumbled along with the broader market Tuesday, dropping 10.30% to close at $102.25. Trading volume was 147% higher than normal, but that's not surprising on a day when the entire market was in a downward spiral, and techs, in particular, led equities lower.

Again, that underperformance of the sector is not a shock, given that tech has been the sector leading the market higher since last year. After a sustained rally, investors often choose to take some profits. Whether that's driven by algorithms or humans doesn't really matter; the effect is the same.

Asana rallied 32.12% in the past month, 66.48% in the past three months and 246.02% year-to-date.

Even in Tuesday's pullback, the stock found support at its 21-day moving average, a sign of continued confidence in the stock. Shares were rebounding Wednesday, along with a market-wide rally.

We're Not In Rally Mode Yet

As always, I caution investors not to become too giddy because a stock or the entire market rally after a sharp pullback. Remember, there are up days during a correction, and down days during a rally. One day does not a trend make.

Corrections, whether in a stock like Asana or in the broader market, are ultimately a good way to flush out excess and set the stage for institutional buyers to add shares at a lower price.

Asana's 50-day moving average is currently between $86 and $87. With shares finding support closer to the 21-day line near $103, it's a signal that institutions took some profits, but weren't in a mood to bail out en masse.

The revenue growth supports that decision.

In the past eight quarters, revenue grew at double-digit rates of 57% or higher. Growth accelerated in the past three quarters, coming in at $89.5 million most recently, a year-over-year gain of 72%.

In the past four quarters, Asana topped analysts' revenue expectations, according to MarketBeat data.

Meanwhile, despite reporting losses, which is very typical with young, fast-growing companies, Asana beat analysts' views. Losses were narrower than Wall Street expected.

This is a situation where a company has attracted institutional investment despite not reaching profitability yet. The number of mutual finds owning shares grew in each of the past three quarters, and stands at 251 as of the second quarter.

Drawing that type of institutional investment is not uncommon with high-potential growth stocks, and Asana is a poster child for that category. Its platform for work management is ideal for remote teams, which of course, are more common today than pre-pandemic.

Teams can collaborate on day-to-day tasks, marketing and sales campaigns and even streamline their processes.

Look For Industry Strength

These days, new companies offering digital work solutions are in high demand. For example, rival project/workflow management company Monday.com (NASDAQ: MNDY) has been on a tear since its June IPO. This stock, too, found support above its 50-day moving average in its recent pullback. Shares of Monday.com are up 41.90% in the past three months, despite a 7.70% pullback in the past month.

The company grew revenue at double- or triple-digit rates in the past six quarters.

Why does it matter what Monday.com is doing, if you are interested in Asana?

It's always a good sign if a stock's overall industry is showing strength. That's a sign that the company you're eyeing is part of a wider trend. Sure, it's absolutely possible to find an outlying stock that's performing well while its industry languishes, but growth stocks are typically part of a widespread uptrend.

 According to MarketBeat data analysts have a "buy" rating on Asana, despite expecting a 37.45% downside, to $67.21.

That brings us to the question of: When should you buy this stock?

Right now, as it's consolidating, it's best to wait. As the broader market has bowed to selling pressure recently, it's not out of the question that more selling is ahead, regardless of Wednesday's bounce back.

Unless Asana begins to show significant price strength that's well ahead of the market, it's best to wait until the market goes back into rally mode. A wide rally tends to bring three-quarters of stocks higher along with it.

Should you invest $1,000 in Asana right now?

Before you consider Asana, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Asana wasn't on the list.

While Asana currently has a "Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The 5 Stocks Here

 


Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Asana (ASAN)2.1$106.02-0.7%N/A-58.57Buy$101.27
Compare These Stocks  Add These Stocks to My Watchlist 

Free Email Newsletter

Complete the form below to receive the latest headlines and analysts' recommendations for your stocks with our free daily email newsletter:

Most Read This Week

Recent Articles

Search Headlines:
MarketBeat Minute Podcast

Each market day you'll get a one-minute market summary to help you invest wisely.

Subscribe to MarketBeat Minute

Resources

Premium Research Tools

MarketBeat All Access subscribers can access stock screeners, the Idea Engine, data export tools, research reports, and other premium tools.

Discover All Access

Market Data and Calendars

Looking for new stock ideas? Want to see which stocks are moving? View our full suite of financial calendars and market data tables, all for free.

View Market Data

Investing Education and Resources

Receive a free world-class investing education from MarketBeat. Learn about financial terms, types of investments, trading strategies and more.

Financial Terms
Details Here
MarketBeat - Stock Market News and Research Tools logo

MarketBeat empowers individual investors to make better trading decisions by providing real-time financial data and objective market analysis. Whether you’re looking for analyst ratings, corporate buybacks, dividends, earnings, economic reports, financials, insider trades, IPOs, SEC filings or stock splits, MarketBeat has the objective information you need to analyze any stock. Learn more about MarketBeat.

MarketBeat is accredited by the Better Business Bureau

© American Consumer News, LLC dba MarketBeat® 2010-2021. All rights reserved.
326 E 8th St #105, Sioux Falls, SD 57103 | U.S. Based Support Team at [email protected] | (844) 978-6257
MarketBeat does not provide personalized financial advice and does not issue recommendations or offers to buy stock or sell any security.

Our Accessibility Statement | Terms of Service | Do Not Sell My Information

© 2021 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see disclaimer. Fundamental company data provided by Zacks Investment Research.