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Asana: Buy The Dip

Mar. 01, 2021 12:52 PM ETAsana, Inc. (ASAN)15 Comments
Gary Alexander profile picture
Gary Alexander


  • The recent tech correction has taken Asana's stock down nearly 20% from all-time highs.
  • The company shone bright in its first public earnings release since going public, with revenue growing 55% y/y.
  • The trend toward remote work is here to stay, and Asana's work enablement platform will continue to grow in relevance.
  • Asana's integrations with top-tier software platforms like Slack and Microsoft will continue to put its software into the mainstream.
  • I do much more than just articles at Daily Tech Download: Members get access to model portfolios, regular updates, a chat room, and more. Get started today »

A common question during sharp market downturns: when looking across the minefield, is there anything worth buying? In my view, Asana (NYSE:ASAN) presents a compelling buy-the-dip opportunity. The work collaboration tool, founded and led by Facebook co-founder Dustin Moskovitz, executed a direct listing last October that opened at $27 per share. Shares climbed steadily until the recent tech reversal, which now has Asana down ~20% from all-time highs:

Though Asana is still far from cheap, I think this temporary fall is a great time to enter into a short/medium-term trade in Asana. There is no question that this is a high-quality software platform with an expansive growth trajectory ahead of it.

Here are the key bullish drivers behind Asana:

  • Remote work isn't going anywhere. Even when the pandemic is over, many companies have planned to increase their proportion of remote workers because A) it's positive for employee flexibility and B) it helps companies reduce their real estate footprint and cut down on overhead. Workflow tools like Asana will only become more relevant in the future.
  • Ultra-high gross margins. Asana has one of the highest gross margin profiles in the software sector, which gives it tremendous runway for future profitability. In its most recent quarter, Asana's pro forma gross margins nearly hit 88% - meaning nearly every dollar of incremental revenue flows through to the bottom line.
  • Top-notch integrations. Despite being a relatively new platform, Asana has struck deals and built integrations with some of the biggest names in enterprise software, including Slack (WORK), Zoom (ZM), and Microsoft (MSFT) - vaulting its product into the pantheon of mainstream software tools.
  • Star power. Having an entrepreneur as high-profile and successful as Dustin Moskovitz at the helm of Asana also increases customers' and investors' trust in the company.


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This article was written by

Gary Alexander profile picture
With combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry today. He has been a regular contributor on Seeking Alpha since 2017. He has been quoted in many web publications and his articles are syndicated to company pages in popular trading apps like Robinhood.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in ASAN over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (15)

Hi Folks,
Growth stocks are tricky! Is ASAN the best of the breed? Thanks
Before you buy ASAN, try the service yourself. You will probably find what I discovered. Asana is an absolutely TERRIBLE company. Their customer service is nonexistent. They should really become a cable TV provider -- it's that bad. I did a Google search and found this website because I was wondering if they were going out of business. After my personal experience with this company, it makes so much sense that their stock prices are dropping. I'm sure this isn't the bottom, so buy it if you enjoy that sinking feeling.
Uranium Henry profile picture
@PM Dawn Wow, you were absolutely dead wrong in every way.
HardytheTrader profile picture
Disagree $ASAN is not looking expensive at all. This is one of the few high growth software stocks you can buy at <20x next year sales. If this is no bargain to you then you will likely not invest into high growth software stocks at all

Brought in at $21.9, increased my position today at $36, let’s see what happens!
An interesting aspect of Asana that made me pull the trigger on a purchase:
Dustin Moskovitz is a HUGE contributor to the Democratic Party, one of the biggest. If that does not pay off in federal contracts, I'd be surprised.
Note: this is not a political statement. It's an analysis. Please keep politics out of responses (if any).
What kind of federal contract? Those employees dont really do WFH.
@paradx Asana is far more than a work from home play. You need to manage teams and projects in any organisation.
@SAvidi Very good point. Asana is project/task management software, which was growing in adoption at the office before Covid. The pandemic only sped up the adoption. More and more companies will be using project/task management software — no matter where their employees work.
Well written and informative. Interesting company for my portfolio’s diversification. Wondering why you aren’t recommending a long position.
msawi11 profile picture
@no_luv_handles does anyone know what this company's products do?
Seems that your perspective along with Beth Kindig analysis are well informed and prescient. Have been layering into both family accounts. Nice to see Mr Moskovitz create yet another juggernaut.
@raising rusty do you trust that lady? I don’t.
@StockHarvestor results with Ms Kindig analysis and entry point s on multiple tech companies have yielded satisfactory benefits in addition to educating our often infantile understanding of the tech landscape.
Has Ms Kindig recommended ASAN or is she long ASAN?
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