Citi cuts Asana price target to $17, maintains neutral rating

On Tuesday, Citi analyst Steven Enders adjusted the price target on Asana stock (NYSE: ASAN) to $17 from the previous $20, while continuing to hold a Neutral stance on the company. The revision follows Asana’s recent financial report, which indicated tempered in-quarter financial performance and a revenue guidance for fiscal year 2026 that fell short of consensus expectations. The company’s revenue growth forecast is now set at 9-10% year-over-year on a constant currency basis, compared to the anticipated 11%. According to InvestingPro data, the stock has declined over 10% in the past week, though it maintains impressive gross profit margins of 89%. InvestingPro analysis suggests the stock is currently fairly valued, with 8 additional key insights available to subscribers.

The report from Asana highlighted ongoing challenges within the technology sector, which have been affecting the company’s expansion rates. These challenges include increased downsell activities, which have contributed to the pressure on growth. Despite these headwinds, Asana has shown positive signs in other areas of its business. The firm’s operating margin is on an upward trajectory, with a significant year-over-year increase projected for fiscal year 2026. While the company maintains a healthy current ratio of 1.49 and holds more cash than debt on its balance sheet, InvestingPro data indicates analysts don’t expect profitability this year.

Asana has also been receiving positive early feedback for its AI Studio, which is currently in early access and is expected to be generally available in the first quarter. This new development could potentially bolster the company’s product offerings in the future.

However, uncertainties surrounding Asana’s operational execution have been raised, particularly with the announcement of a CEO transition, changes in pricing strategies, and a reallocation of go-to-market resources, which includes a recent reduction in force. These factors have led to a cautious outlook from Citi, despite what appears to be conservative revenue guidance and a more appealing valuation post-market, with the company’s enterprise value to revenue ratio standing at 3.5 times.

In other recent news, Asana reported a 10% year-over-year increase in revenue for Q4 2025, reaching $188.3 million, slightly surpassing analyst expectations. Despite the revenue beat, Asana’s future guidance and market conditions prompted Citizens JMP to lower the company’s stock price target from $25 to $22, while maintaining a Market Outperform rating. The company also achieved positive free cash flow for the fiscal year, totaling $2.6 million. Asana’s guidance for Q1 FY2026 projects revenue between $184.5 million and $186.5 million, with a full fiscal year 2026 revenue expectation between $782 million and $790 million.

KeyBanc Capital Markets maintained a Sector Weight rating on Asana, noting that the recent margin increase did not drive the expected revenue acceleration. The company announced that co-founder and CEO Dustin Moskovitz will step back from his role, transitioning to the board, which may influence the company’s direction and investor sentiment. The announcement of Asana’s AI Studio platform, aimed at enhancing workflow coordination, was tempered with cautious expectations regarding its potential outcomes. Asana’s dollar-based net retention rate remained stable at 96%, though it fell slightly short of Citizens’ projection. The company’s Remaining Performance Obligations (RPO) grew by 23%, exceeding consensus expectations.

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