Asana's Strong Trajectory Fueled by Insider Buys and Product Supremacy: Analyst

JMP Securities analyst Joe Goodwin reiterated Asana Inc ASAN with a Market Outperform and a $30 price target.

The company disclosed on August 22 via a Form 4 filing that Founder & CEO Dustin Moskovitz purchased 690K shares on August 17-18 at an average price of $20.05 for a total consideration of $13.8 million, which left the stock up ~7% on August 22, and after the stock has increased 58% YTD versus the Nasdaq's 30% increase. 

This latest insider buying is Mr. Moskovitz's largest since he announced on the company's June 1 earnings call that he had entered into a 10b5-1 trading plan to purchase up to 30 million shares of Asana's Class A common stock, representing ~25% of the float, which began on June 8 and expires on December 31, 2023.

Mr. Moskovitz already owns ~58% of the outstanding shares in the company. 

Goodwin continues to like Asana because Mr. Moskovitz can purchase up to another ~27.23 million shares of stock under the 10b5-1 trading plan noted above. 

Asana has product superiority for work management in the enterprise, supported by its growth rate in the $5K+ category of 32% in 1Q (compared to only 14% in the under $5K category).

The company addresses a large TAM, estimated to be $51 billion by 2025, which advances in large neural networks may compound.

After years of outsized investments, the company is narrowing its losses and is on track to be FCF positive by the end of 2024 and FCF breakeven for the full year 2024.

Goodwin maintained his FY24 non-GAAP EPS estimate of ($0.50) (consensus ($0.52)) on revenue growth of 18%. He reiterated his FY25 non-GAAP EPS estimate of ($0.38) (consensus (of $0.32)) on revenue growth of 20% and FY26 non-GAAP EPS estimate of ($0.20) (consensus of $0.00) on revenue growth of 19%. 

Price Action: ASAN shares traded higher by 2.87% at $22.30 on the last check Wednesday.