The stock market remained in a tug-of-war between bulls and bears early Thursday. Investors are confused about the likely course of monetary policy going forward and the potential economic impact of higher interest rates, and some have chosen to get out of stocks in favor of Treasury bonds that sport their highest yields in years. Stock market futures were generally mixed, with the Dow Jones Industrial Average (^DJI -0.51%) poised to post a modest gain at the open.
That's not to say, though, that there weren't some big moves among individual stocks. Asana (ASAN 0.79%) got a nice boost as the trends that have helped bolster the tech industry continued to make their presence felt. On the softer side, shareholders in Build-A-Bear Workshop (BBW -0.61%) also woke up to good news. Read on to learn more about both companies and why their investors are celebrating.
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Asana gets a big vote of confidence
Shares of Asana jumped 16% in premarket trading. The work management software platform provider reported fiscal fourth-quarter financial results for the period ending Jan. 31 that showed continued strong growth, and the company's founder stepped up with a major investment to express his view that the stock is inexpensive.
Asana reported a 34% rise in fourth-quarter revenue year over year to $150 million. The company lost money, but adjusted losses of $33.2 million, or $0.15 per share, were considerably narrower from the year-ago period. For the full 2023 fiscal year that just ended, sales climbed 45% from the previous year.
Several favorable business metrics helped boost Asana's prospects. The number of clients spending $100,000 or more on Asana's software platform annually jumped by almost half to exceed the 500 mark. Dollar-based net retention rates for those high-value customers exceeded 135%, and Asana saw strength among its smaller customers as well.
Asana does see its growth slowing considerably in fiscal 2024, projecting revenue of $638 million to $648 million, which would imply a growth rate of 17% to 18%. It also expects to keep losing money. However, CEO Dustin Moskovitz filed a trading plan that would allow him to buy up to 30 million shares of the software-as-a-service stock, and that was a big expression of how confident the company founder is about the long-term prospects for the business.
A plush financial report from Build-A-Bear
Elsewhere, Build-A-Bear Workshop posted its own fiscal fourth-quarter financial results for the period ending Jan. 28. The stock jumped 14% in response to favorable numbers.
Build-A-Bear's financials held up well. Revenue of $145 million was up 12% year over year, even though growth in e-commerce demand slowed to a near standstill. Improved gross profit margin and cost reductions helped to bolster the company's bottom line, with adjusted net income rising 21% to $19.1 million, or $1.30 per share.
Investors were also pleased that Build-A-Bear continued its practice of returning capital to shareholders through special dividends. The do-it-yourself stuffed animal retailer declared a $1.50-per-share dividend payment that will go to shareholders of record as of March 23. That adds to $24 million in stock repurchases that Build-A-Bear has done over the past year.
Looking ahead, Build-A-Bear expects revenue to rise 5% to 7% in the coming fiscal year, with pre-tax income likely to rise an even faster 10% to 15% year over year. Those trends are exactly what profit-hungry investors want to see from companies in the current environment, and the report continued a string of strong results from Build-A-Bear recently.
