Investing 02-12-2022 20:42 18 Views

As Asana stock price tumbles, has it become a bargain?

Asana (NYSE: ASAN) stock price plunged to the lowest level on record after the company published a weak forward guidance. It crashed to a low of $15.60, which was about 90% below its all-time high. As a result, the company’s market cap plunged to a low of $3.83 billion.

Asana weak guidance

Asana is a leading technology company that offers Software-as-a-Service (SaaS) solutions to companies like Tesco, Spotify, Uber, and Slack among others. It is a leader in collaborative wirk management solutions. 

After experiencing remarkable growth during the pandemic, Asana’s performance has soured recently. This is also in line with other companies in the industry like Salesforce, Monday, and Atlassian.

Asana published its financial results on Thursday. In a statement, the firm said that its revenue grew by 41% year-on-year to $141.4 million in the third quarterer, bringing its annualised quarterly run rate to $566 million. Asana has over 18,700 customers spending $5,000 or more while its largest customers are also the fastest growing.

Asana stock price crashed after the firm lowered its forward guidance. It expects its revenue to grow by about 30% to between $144 million and $146 million. Its loss is expected to be between $60 million and $57 million. In a statement, the firm’s CEO said:

“We’re actively managing to mitigate the impact to the bottom line and taking the opportunity to elevate and further build our enterprise business.”

Asana share price has dropped as investors assess whether it is a growth or a value stock. Also, there are concerns about the company’s losses and total valuation. In a statement, an analyst at Baird downgraded the shares and set a target at $15. Piper Sanfler downgraded it saying that there was limited visibility on when it will resume growth. He said:

“While we are encouraged by leadership’s pivot to focus on the very large enterprise customer segment where it continues to show solid progress, ASAN appears to be entering a potential 6-9 month digestion period.”

Asana stock price forecast

ASAN chart by TradingView

The daily chart shows that the ASNA share price has been in a strong bearish trend in the past few months. During this period, the stock found a strong support at $16.40, where it has struggled to move below this year.

Asana remains below all moving averages while the Relative Strength Index moved below the neutral level of 50. Therefore, the stock will likely continue falling as sellers target the next key support at $15. In the long term, the shares will likely resume the bullish trend as it becomes a bargain.

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