Asana Stock Is Overvalued, Bernstein Analyst Says

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The market Asana serves is “somewhat commoditized,” according to Bernstein analyst Zach Chrane.


Gabby Jones/Bloomberg

If you were thinking of buying shares of

Asana,

the project-management software company that just came public via a direct listing on the New York Stock Exchange, you might want to think again.

Bernstein analyst Zach Chrane picked up coverage of Asana (ticker: ASAN) late Thursday with an Underperform rating and $19 target price. The company opened for trading last week at $27, after the NYSE set a reference price” on the stock of $21. Near midday on Friday, the stock was off about 1% to $26.27.

Chrane’s assessment is that there’s nothing all that special about Asana’s software. The company declined to comment on the report.

“Asana provides a project management SaaS [software as a service] solution for relatively basic functions, in a market that is somewhat commoditized, in which we view Asana as a second-tier vendor,” Chrane wrote in a research note. “Competing products have similar core functionalities and pricing. Vendors in this field tend to frame their future growth as driven by market growth, rather than being driven by genuine differentiation. Asana has a solid product and a talented, visionary management team, but its solution does not stand out among peers.”

The company’s founder and CEO is Dustin Moskovitz, a co-founder of Facebook (FB).

A Bernstein survey found that the best-known player in the project- management software market by far is Microsoft Project, followed by

SmartSheet

and Trello, which was acquired in 2017 by

Atlassian.

(Barron’s uses Trello as part of its daily editorial work flow.)

Chrane says Asana’s product “appears easily replicable, technologically,” and he adds that the company faces “increasing competition from other pure-play vendors and mega-scale players.” He contends that the company’s self-described differentiation

Asana jumps 10% in trading debut after opening at $4.2 billion valuation

NYSE trader


  • Asana jumped as much as 10% in its first day of trading on Wednesday.
  • The stock opened at $27 per share, 29% above its reference price of $21. The ensuing climb marked a 10% increase from the opening price.
  • With 155 million shares outstanding, Asana sported a valuation of $4.6 billion at its peak after opening at $4.2 billion.
  • Visit Business Insider’s homepage for more stories.

Asana jumped as much as 10% in its first day of trading on Wednesday, hitting a high of $29.79.

Asana is a work management software company based out of San Francisco. The firm went public via a direct listing rather than the traditional IPO route.

With a reference price of $21 per share, Asana opened at $27 per share in the first minute of trade, giving it a valuation of $4.2 billion. At its peak on Wednesday, Asana sported a valuation of $4.6 billion, based on about 155 million shares outstanding.

Asana was founded in 2008 and markets a web and mobile application designed to help teams organize, track, and manage their work. The firm counts other software based companies like SmartSheet and Atlassian as its competitors. 

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According to its S-1 filing, Asana  reported fiscal year 2020 revenue of $142.6 million, representing year-over-year growth of 86%. Net loss in fiscal year 2020 was $118.6 million, more than double from the prior year’s loss of $50.9 million. 

As of January 31, the company had over 1.2 million paid users.

A direct listing differs from a traditional IPO in that a direct listing does not raise any money for the company going public. Instead, a direct listing allows employees and shareholders to