D.A. Davidson raises Asana to buy on Q4 outlook

By Liz Moyer

Investing.com -- Asana Inc (NYSE:ASAN) was rising on Friday ahead of earnings next week after D.A. Davidson upgraded it to a Buy from Neutral.

Shares of the project management software maker rose 9% and are up 20.6% this year. D.A. Davidson analysts reiterated a price target of $18, which implies 7.7% upside from current levels.

D.A. Davidson said in a research note on Friday that it has reviewed data from Sensor Tower that shows Asana has continued growth in active users and a “marked acceleration” in downloads.

The analysts said guidance for revenue in fiscal fourth quarter 2023 is for $144 million to $146M, which would be 30% growth from a year ago. But based on their analysis of the Sensor Tower data on both active users levels and download activity, the analysts said revenue could be around $150M to $151.2M.

Wall Street expects Asana to report a 27 cent loss per share on revenue of $145M.

In November, Asana cut 9% of its workforce to improve operational efficiencies and costs and better align the workforce with business needs and growth opportunities. D.A. Davidson said in the note it has also been “working to better apply what it has done for its most successful deployments more broadly.”

The moves “put the company in position to deliver much better and more balanced results going forward,” the note said.