Asana Shares Surge on Q3 Revenue Beat and Upgraded Forecasts

Asana Inc. (NYSE: ASAN) shares surged by up to 37% following an earnings report that exceeded third-quarter revenue expectations and provided positive forecasts. Analysts believe that these results indicate stability for the business management platform provider and particularly highlight the favorable reception of the AI Studio product.
Asana generated $183.9 million in revenue for the third quarter. This figure represents a 10% increase compared to the same period last year and surpasses the anticipated $180.7 million. The company also reported a lower loss per share of 25 cents, compared to 28 cents from the same period last year. The adjusted loss per share improved from a loss of 4 cents last year to a loss of 2 cents.
Looking ahead, Asana projects fourth-quarter revenues to be between $187.5 million and $188.5 million. This figure is slightly above the Bloomberg consensus estimate of $187.9 million. The adjusted loss per share is expected to be between 1 cent and 2 cents, aligning with the estimated loss of 1.5 cents.
The company also provided guidance for the fiscal year 2025, forecasting an adjusted loss per share of 14 to 15 cents, which is more optimistic than the expected loss of 19 cents. Annual revenue expectations are set between $723.0 million and $724.0 million, exceeding the anticipated $720.2 million.
In response to these results, analysts revised their price targets for Asana. DA Davidson analyst Lucky Schreiner maintained a Neutral rating while raising the price target from $13.00 to $20.00. Schreiner acknowledged Asana's strong performance under the leadership of new CFO Sonalee Parekh and the initiatives the company is taking to ensure future revenue growth and margin expansion. However, the analyst wants to see consistent execution before fully supporting the stock.
JMP Securities analyst Patrick Walravens maintained an Outperform rating while increasing the price target from $21.00 to $25.00. Walravens emphasized Asana's financial results that exceeded expectations and the improvements in the company's operating margin and revenue growth. Despite a slight decline in billings, the company demonstrated a healthy growth in remaining performance obligations (RPO), contributing to the stock's rise in after-hours trading.
Citi analyst Steven Enders also raised his price target for Asana from $13.00 to $16.00 while maintaining a Neutral rating. Enders pointed out Asana's third-quarter performance that exceeded expectations and signs of progress in its go-to-market execution. The focus on cross-selling the new AI Studio product and margin improvement was also noted. However, Enders remains cautious due to potential execution risks and a challenging demand environment, looking for further evidence of successful upselling before changing the rating.