What happened
Asana (ASAN 1.77%) has less than one week to go before it publishes its latest set of quarterly results, and it seems that pundits aren't expecting a great performance. On Thursday, an analyst initiated coverage of the work platform software developer's stock, and his take didn't exactly inspire folks to scoop up some shares. As a result, Asana fell by nearly 7% on the day.
So what
That analyst is Citigroup's Steven Enders, who before market open started his coverage of Asana with a neutral recommendation at a price target of $23 per share.
In his research note, Enders wrote that the company is facing significant competition in the workplace platform space. That'll be a challenge to surmount, as compared to certain peers Asana has limited cash on hand. Meanwhile, its costs are high compared to those of competitors.
Such a take adds to investor concerns about the company's future. Although it is still growing revenue at double-digit rates, that growth is expected to slow -- in its most recently reported quarter, it posted a 57% year-over-year gain on the top line. However, the company is currently guiding for an annual rate of 43% at most for the entirety of its current fiscal 2023. And, like many young tech companies, Asana routinely posts net losses.
Now what
We'll see if Enders' neutral stance is justified next week, since Asana is slated to publish its second-quarter fiscal 2023 results next Wednesday, Sept. 7. On average, analysts tracking the stock aren't particularly bullish; they're expecting the company to post a deeper net loss of $0.39 per share, well down from the $0.23 shortfall of the same period last year. A year-over-year comparison of sales estimates was not immediately available.
