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On Wednesday, Scotiabank (TSX:BNS) analysts raised the price target for Asana stock (NYSE: ASAN) to $16.50 from $12.00, while maintaining a Sector Perform rating. This adjustment follows Asana’s recent financial performance and strategic developments. According to InvestingPro data, Asana’s stock currently trades at $19, with analyst targets ranging from $10 to $23. The company’s market capitalization stands at $4.47 billion, and 13 analysts have recently revised their earnings estimates upward for the upcoming period.
Asana reported a $1.8 million revenue beat and a 9.8% year-over-year growth, adjusted for the leap year. The company maintains impressive gross profit margins of 89.36%, demonstrating strong operational efficiency. However, the company lowered its fiscal year 2026 constant currency revenue guidance by $14 million, indicating a growth of 7.6% compared to the previous estimate of 9.5%. Foreign exchange is expected to be a 0.5% tailwind for fiscal year 2026, shifting from an earlier 0.9% headwind.
Beginning in April, Asana observed changes in the macroeconomic environment, with management noting ongoing pressure for downgrades, particularly in the enterprise and middle-market segments and the tech sector. Despite this, the net revenue retention rate remained stable for the third consecutive quarter, exceeding 95%, though it is anticipated to face pressure in the second quarter due to further downselling.
A significant factor in the latest developments was a low-teens percentage downgrade in annual contract value from a major three-year contract renewal exceeding $100 million. This renewal, however, underscores Asana’s strategic importance at the enterprise level.
On a positive note, Asana’s AI Studio achieved over $1 million in annual recurring revenue, with management projecting it could reach 1% of annual recurring revenue by the end of the year. While there is optimism regarding the AI Studio’s early momentum and potential for accelerated growth in the latter half of the year, Scotiabank analysts remain cautious about broader demand trends and continued downsell pressure. The new price target reflects a valuation based on 5.1 times the estimated 2026 enterprise value to gross profit, representing a slight discount to peers due to Asana’s slower revenue growth.
In other recent news, Asana reported its first-quarter fiscal year 2026 results, exceeding expectations with a revenue of $187 million, slightly above the consensus estimate of $186 million. The company also achieved its first-ever positive operating margin of 4.3% and a non-GAAP earnings per share of $0.05, surpassing the projected $0.02. Despite these positive results, Asana revised its revenue guidance midpoint downward by 0.4% due to macroeconomic challenges. Analysts have responded with mixed adjustments to Asana’s stock price targets. BofA Securities lowered its price target to $21, citing macroeconomic concerns, but maintained a Buy rating. Conversely, JPMorgan raised its price target to $14 while keeping an Underweight rating, highlighting the growth of Asana’s AI Studio product. DA Davidson and Jefferies also raised their price targets to $17, with DA Davidson maintaining a Neutral rating and Jefferies a Hold rating. Citizens JMP reiterated a Market Outperform rating and kept a price target of $22, emphasizing optimism about Asana’s future performance.
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