Microsoft shares jump after fourth-quarter earnings beat on AI-fueled cloud growth
On Wednesday, Piper Sandler analysts increased their price target for Asana stock to $19 from $17, while maintaining an Overweight rating. The decision comes as Asana shows progress in key verticals, including manufacturing, energy, and financial services. The $4.47 billion market cap company has demonstrated strong momentum, with a 39.71% return over the past year. Despite these advancements, the company’s updated full-year guidance of 7-9% top-line growth led to an 8% after-hours decline in stock value, attributed to management’s comments on increased deal scrutiny and downgrade activity, particularly in the Americas enterprise and tech segments. According to InvestingPro analysis, the stock is currently trading near its Fair Value.
The analysts highlighted the company’s solid margin improvements, which are paving the way for continued operating leverage. InvestingPro data reveals an impressive gross profit margin of 89.36%, though the company remains unprofitable over the last twelve months. They also noted the early but growing adoption and monetization of Asana’s AI Studio, which is expected to benefit from the release of new tiers and functionality.
Piper Sandler’s revised price target reflects slightly higher estimates, factoring in a $4 million foreign exchange tailwind to the prior full-year guidance. The analysts also cited a 23% estimated free cash flow margin for 2029, up from a previous estimate of 20%, indicating greater confidence in Asana’s margin trajectory.
Asana’s management remains focused on capitalizing on these positive developments while addressing the challenges posed by increased deal scrutiny in certain segments. The company’s efforts to enhance its product offerings and expand its market presence continue to be a focal point for analysts and investors alike.
In other recent news, Asana reported a notable financial performance, with a $1.8 million revenue beat and a 9.8% year-over-year growth. However, the company adjusted its fiscal year 2026 revenue guidance downward by $14 million, indicating a growth rate of 7.6% compared to the previous 9.5% estimate. A significant development for Asana was the renewal of its largest deal in history, a three-year contract valued at over $100 million, although it came with a lower average annual contract value. Analysts from Scotiabank (TSX:BNS), DA Davidson, and JPMorgan raised their price targets for Asana, reflecting mixed sentiments based on strategic renewals and AI product growth, while BofA Securities lowered its target due to macroeconomic concerns.
KeyBanc maintained a Sector Weight rating on Asana, pointing to the strategic importance of the large contract renewal. Despite the challenges, Asana’s AI Studio achieved over $1 million in annual recurring revenue, with management optimistic about its growth potential. Analysts expressed concerns about broader demand trends and customer retention, especially in the enterprise and mid-market segments. Investors are keenly observing Asana’s strategies and innovations, particularly with the upcoming participation in DA Davidson’s Technology Conference. The company’s focus remains on profitability and margin expansion, with several strategies in place to address these areas.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.