Insiders And Institutions Build Their Positions In Asana, Inc
Insider activity in Asana, Inc (NYSE: ASAN) has been mixed over the past year but the bias for share prices is most definitely to the upside. While two lower-level insiders were making small, periodic sales of their stock the CEO and a director went on a buying spree. The net of buying and selling activity over the past year is worth 1.5% of the market cap with shares at $60, about 3.4% of the total shares, and brought total insider holdings to nearly 54.5%. That’s quite a lot of insider skin and most of the buying was done in the last 90 days. In fact, two transactions by the same CEO and director amount to 4.004 million shares or about $291.08 million. Now, activity peaked in Q4 and has since backed off but net activity is still firmly bullish and it’s very early in the quarter.
Institutional activity has also been very robust this year with the net of buying worth $1.7 billion. That’s about 15% of the market cap with shares trading near $60 and brings total institutional ownership to over 30%. Unlike insider activity, the institutional activity peaked in the 3rd quarter of 2021 but is likewise still strongly bullish coming into the year. With the company set to report earnings at the end of March and the expectations for sequential and YOY growth robust, we take this as a very good sign indeed.
The Analysts Are Adjusting Their Q4 Targets For Asana, Inc
The analysts are bullish on Asana, Inc but the sentiment has been cooling over the last month or so. The current consensus rating is a Weak Buy with a consensus price target that has moved 12% lower over the last 30 days. The takeaway, however, is that this consensus is still up 15% over the last 3 months and more than 150% from last year implying about 35% of upside for share prices. In our view, Asana, Inc is well-positioned as a cloud-based work-services and project management platform and should easily exceed the analyst’s consensus estimates. The analysts are currently expecting a 5% sequential increase and 53% YOY gain in revenue to $105 million.
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Last quarter, the company exceeded the analyst’s estimates but shares fell hard on concerns of slowing growth, from 72% YOY in the previous quarter to only 70% in Q3. This was compounded by a deceleration in billings growth to 56% from the mid-80’s and taken advantage of by the short-sellers. Short interest topped 12% going into the report and helped drive shares down nearly 60% in the time since. This is opening up a buying opportunity in the stock that has been confirmed by the analysts and institutions. In our opinion, price action has been decoupled from reality and driven to an extreme low that is setting the company up for a massive rebound later this year.
Oppenheimer analyst Ittai Kidron said that Asana's billings growth levels "can be misleading, given the changing mix of monthly [and] annual subscriptions and the impact of large deals." Oppenheimer has an outperform rating on the stock and the high price target of $115.
The Technical Outlook: Asana, Inc Is Nearing A Bottom
Shares of Asana, Inc are down hard over the past two months and may move even lower. The price action is still iffy but there are signs a bottom could be near. Price action since the early December 2021 low has been to the side and confirmed support at these levels. Along with that, the stochastic and MACD are divergent from the price action suggesting the market is ready to reverse. Assuming these levels hold, we would expect to see bottoming continue over the next month or so until new news comes out or the company reports Q4 results. Regardless, the insiders and institutions think now is a good time to buy and we aren’t arguing with them about it.
Companies in This Article:
| Company | Current Price | Price Change | Dividend Yield | P/E Ratio | Consensus Rating | Consensus Price Target |
|---|
| Asana (ASAN) | $14.26 | -3.1% | N/A | -12.40 | Hold | $14.21 |
Experience
Thomas Hughes has been a contributing writer for InsiderTrades.com since 2019.
Areas of Expertise
Technical analysis, the S&P 500; retail, consumer, consumer staples, dividends, high-yield, small caps, technology, economic data, oil, cryptocurrencies
Education
Associate of Arts in Culinary Technology
Past Experience
Market watcher, trader and investor for numerous websites. Founded Passive Market Intelligence LLC to provide market research insights.
