PreMarket Prep Stock Of The Day: Asana

The pain in the growth technology sector continues: Asana Inc. ASAN is making a new low for the move after its fourth-quarter beat, which was coupled with lower first-quarter EPS guidance. The price action following the release makes it the PreMarket Prep Stock of the Day.

Asana's Fall From Grace: The software issue made its all-time high in November at $145.79 and was nearly cut in half by year-end when it finished 2021 at $74.55. It took another shellacking in January, falling to $52.48, and rebounded modestly to end February at $54.79.

Asana Price Action Ahead Of Earnings: Asana made a new low for the move on Tuesday at $40.63 and rebounded to end the session at $44.59. It participated in Wednesday’s market euphoria, adding over $4 to close at $48.81 ahead of its report.

Asana's Q4 Beat, Mixed Guidance: After the close on Wednesday, the company reported quarterly losses of 25 cents per share, which beat the analyst consensus estimate of a 28-cent loss by 10.71%.

The company reported quarterly sales of $111.9 million, which beat the analyst consensus estimate of $105.16 million by 6.41%. 

The Street is focusing on the mixed first-quarter guidance. The wider-than-expected first-quarter adjusted EPS estimate is not being offset by an upward revision for sales of $114.5-$115.5 million vs. an $110.9-million estimate.

PreMarket Prep's Take On Asana: When the issue was being covered on the show Thursday, it was stuck at the $36 area, lower by $13 from its closing price. Co-host Dennis Dick noted the relentless insider buying by one of its founders, Dustin Moskovitz. Dick said he admired Moskovitz's conviction, but added: “he has been wrong.”

The author of this article noted a persistent buyer supporting the stock at the $36 area and alerted traders that this was in the area of a June 2021 low ($35.26). As a result, it was a potential buy zone for investors looking to cover a short or initiate a long in the issue.

Asana did go on to the bottom in the premarket at $35.23, but rebounded heading into the open.

ASAN Price Action: The opening print for the session was $37.35, and Asana dropped to $36.42 before it reversed course.

The ensuing rally took the issue to $39.23, but sellers have remerged. The stock, which has retreated to the area of the open and is attempting to stabilize, was down 24.18% at $37.01 midday Thursday. 

The discussion on Asana from Thursday’s show can be found here:

Photo courtesy of Asana.