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On Tuesday, Piper Sandler adjusted its outlook on Asana (NYSE:ASAN) shares, reducing the price target to $18 from the previous $27 while continuing to endorse the stock with an Overweight rating. The reassessment comes in the wake of the company’s latest quarterly report, which revealed a mixed picture of financial progress and executive changes. InvestingPro data shows the stock trading at $11.91, significantly below its 52-week high of $27.77, reflecting recent market pessimism. According to InvestingPro analysis, Asana currently appears undervalued based on its Fair Value assessment.
Asana’s fourth-quarter margin outperformance and the forecast for fiscal year 2026 margins to reach up to 5%—a significant improvement over the -1.3% market consensus—were seen as positive developments. The company maintains impressive gross profit margins of 89.4%, as revealed by InvestingPro data. These metrics were overshadowed by news of a CEO succession plan and a modest growth forecast of 9%, a decrease from the prior consensus of 11%.
The announcement that Dustin Moskovitz, the billionaire founder of Asana, is stepping down after 15 years at the helm has caused a stir among investors. Moskovitz’s departure is considered a significant event given his central role in the company’s journey. The market’s reaction was swift, with Asana’s shares dropping 29% in after-hours trading following the news.
Despite the initial negative response from investors, Piper Sandler analysts believe that the sell-off may have been an overreaction. They point to Asana’s robust $750 million annual recurring revenue and impressive 90% gross margin. The firm also notes that there is a new focus within Asana on achieving sustainable profitable growth. InvestingPro subscribers have access to 10 additional key insights about Asana, including detailed analysis of its financial health and growth prospects through comprehensive Pro Research Reports, available for over 1,400 US stocks.
To justify the new price target, Piper Sandler cites reduced growth estimates and a lower enterprise value to free cash flow multiple of 23 times, down from the previous 26 times. This adjustment reflects the perceived heightened execution risks as Moskovitz transitions out of his leadership role. Nonetheless, the firm maintains an Overweight rating on Asana shares, indicating a favorable risk-reward balance despite the recent challenges.
In other recent news, Asana has reported its fourth-quarter earnings, which have led to adjustments in analyst ratings and price targets. UBS has lowered its price target for Asana to $14, maintaining a Neutral rating, highlighting concerns about Asana’s growth prospects and customer retention, particularly among larger clients. RBC Capital has reaffirmed its Underperform rating with a $10 price target, citing a disappointing growth outlook and the announcement that CEO Dustin Moskovitz will step down. Scotiabank (TSX:BNS) has also reduced its price target to $12, maintaining a Sector Perform rating, while noting the company’s smallest revenue beat since going public.
Morgan Stanley (NYSE:MS) has adjusted its price target to $15, keeping an Equalweight rating, and pointed out a shift in investor sentiment due to Asana’s conservative fiscal year 2026 guidance and leadership changes. BofA Securities has lowered its price target to $25 but maintains a Buy rating, suggesting that Asana’s conservative revenue outlook might be strategic given potential positive factors like AI Studio and operating margin improvements. The company is facing challenges from macroeconomic headwinds and foreign exchange fluctuations, which could impact its growth projections. Despite these challenges, some analysts see potential for margin expansion and long-term growth opportunities.
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