Shares of work management software maker Asana (ASAN, Financial) dropped 18.4% in the pre-market session following the announcement of its second-quarter earnings.
Asana's full-year revenue guidance fell short of Wall Street's expectations. The company's net revenue retention also dipped below 100%, indicating that customers are spending less on its products.
The company cited delays in deals and large customers renewing with lower commitments as key issues. Consequently, growth reacceleration is anticipated to be modest in the near term.
Additionally, the departure of CFO Tim Wan has raised concerns. He will be succeeded by Sonalee Parekh, the former CFO of RingCentral.
Asana Inc (ASAN, Financial), traded on the NYSE, saw a significant price drop of 5.12%, bringing its current price to $12.61. The stock's market capitalization stands at $2.88 billion, with a price-to-book ratio of 9.01. Notably, its Altman Z-Score signals distress with a score of 0.88, implying a possibility of bankruptcy in the next two years. Asana's Beneish M-Score, however, indicates that the company is unlikely to be a manipulator, registering a score of -3.62.
The company's financials highlight some concerning metrics, such as a negative EBITDA margin of -35.17% and an operating margin of -40.28%. The trailing twelve months' (TTM) earnings per share (EPS) is listed at -$1.15, which aligns with the firm's negative profitability trend. Over the past year, Asana's revenue per share grew by 7.6%, yet its net revenue retention of less than 100% has raised flags among analysts.
In terms of trading signals, Asana's Relative Strength Index (RSI) over a 14-day period is at 46.25, suggesting neutral momentum. The stock's volatility is relatively high at 38.26%, reflecting the uncertain market sentiment. Additionally, the company has a cash-to-debt ratio of 1.89, which indicates a moderate level of financial stability, although its equity-to-asset ratio is 0.33.
The GF Value for Asana is estimated at $22.90, indicating that the stock might be undervalued considering its current price. Investors can explore more about the GF Value of Asana for a deeper analysis.
