Asana Growth Materially Lags Peers, JP Morgan Cuts Price Forecast

Anusuya Lahiri

March 11, 2025

Benzinga

Asana Inc’s (NYSE:ASAN) stock plunged after multiple Wall Street firms cut their respective price targets.

Asana reported fourth-quarter revenue of $188.33 million, beating analyst estimates of $188.1 million. The company reported breakeven fourth-quarter earnings, beating analyst estimates for a loss of 1 cent per share.

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Asana guided for first-quarter revenue of $184.5 million-$186.5 million and first-quarter adjusted EPS of $0.02.

Asana co-founder, CEO, and chair Dustin Moskovitz informed the board of his intention to transition to chair. Asana has retained an executive search firm to search for a new CEO.

JP Morgan analyst Pinjalim Bora maintained Asana with an Underweight rating and lowered the price target from $15 to $13.

The analyst writes that Asana’s fourth quarter highlighted the stabilization of growth and retention metrics while profitability outperformed. The fourth-quarter revenue aligned with consensus and marked a steady growth versus last quarter on an FX-adjusted basis.

Calculated billings landed slightly above, accelerating into the low-double-digit zone. Dollar-based net retention rate (DBNRR) was stable at 96% on a reported basis, while the in-quarter net retention rate improved sequentially.

While non-tech verticals were stable, Asana highlighted continued softness in the tech vertical (primarily driven by a reduction in seats and one logo churn).

This pressured the reported DBNRR for customers spending over $100K in ACV, which contracted 3 pts sequentially to 96%, landing in line with the overall reported number for the first time.

On AI studio, Asana reported that the early momentum had exceeded the company’s expectations. It has already amassed a multi-million dollar pipeline and paid customers.

As such, the company aims to establish a dedicated sales team to capitalize on the opportunity and embark on some broader sales capacity alignment.

The brightest spot in the results was a solid improvement in profitability in the quarter and in the guide.

While the company highlighted several avenues of conservatism in the guide (not baking in any improvement in net retention or performance of the tech vertical and baking in de minimis contribution from AI Studio, with no contribution from consumption), Bora’s understanding is that the guide was set a couple of weeks ago, and does not bake in any deterioration in macro from the current levels, which could be a risk to the plan (offset by potential improvement in FX during that period).

Overall, while growth continues to materially lag that of peers, which would likely drive underperformance in the shares in the near term. Bora noted Asana as essentially a profitability story from here on out, with multiple levers to drive material improvement in margins in the future.

Bora projected first-quarter revenue of $186 million and adjusted EPS of $0.02.

Price Action: ASAN stock is down 23.6% at $12.74 at last check Tuesday.

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