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The potential market for Asana\u2019s product is undoubtedly massive. Many companies–from 50 person development teams to trillion dollar software companies–require digital workplace management. The key product Asana offers is the Work Graph: a software which centralizes all the projects, tasks, goals, and milestones of a firm. Theoretically, this would save a company time otherwise spent on internal communication between groups and individuals; instead of time-consuming emails, briefings, and memos, workers can easily track real time work progress across group projects through Work Graph\u2019s interface. Since its founding in 2008, many team collaboration tools such as Trello have emerged over the years, and Asana currently sits within a highly competitive playing field occupied by companies like <\/span>Monday.com, Microsoft, ServiceNow, Workfront, Airtable, Planview, and Salesforce.<\/span> However, in many cases, Asana is not in direct competition with these companies and has integrated its platform with various productivity tools offered by software companies such as Microsoft and Salesforce.\u00a0<\/span><\/p>\n <\/p>\n Asana expects its TAM to grow to $32 billion by 2023. In upcoming years, the project management software\/service industry in the US is expected to expand significantly with a CAGR of 13%. Within the industry are advantages for first movers due to high switching costs for consumers. Companies that opt to switch software for their employees have to undergo retraining costs and periods of lost productivity in employee adjustment to new software. Thus, early user growth is crucial to building a robust business moat as most users will be unwilling to switch to other services. Over the past year, Asana has done well in consumer growth, significantly expanding the number of paying customers spending $5,000 or more on an annualized basis in 2020 by 53% to a total of 11,272 users.\u00a0 Notably, its most expensive subscription package–customers spending $50,000 on an annualized basis–has grown over 92% over the past year to 485. It was also with this group of customers which Asana saw its highest dollar based net retention rates at over 140%.\u00a0 In comparison with its peers, Asana offers a more attractive freemium model. Similar tools such as Wike, JIRA, and Trello, either don\u2019t offer free subscriptions or the full functionality and flexibility of Asana\u2019s product. When coupled with a conversion rate of 4.7% for premium subscriptions (compared to the industry average of 2.35%), many investors believe Asana is in a great position to expand its pool of potential customers.<\/span><\/p>\n <\/p>\n Risk Factors\/Valuation<\/b><\/p>\n <\/p>\n Asana is a high risk investment given it is currently trading at a handsome valuation of 60x sales; second highest among its peers within this industry who trade on average 18x sales. Additionally, it is projected to not turn a profit for the next three years. However, much of the disparity in valuation is hidden behind extensive investments in R&D and sales\/marketing which amount to 45% and 67% respectively of Asana\u2019s top line. With a gross margin of 87% versus the SaaS industry average of 70%, Asana\u2019s path to profitability appears to be relatively straightforward for tech investors. Currently, the numbers indicate that Asana\u2019s leadership is heavily investing in user growth, retention, and conversion; a move which will solidify Asana\u2019s competitive advantage in the long term. Over the last few years, Asana has landed major partnerships and added to users of its project management software an impressive list of big name brands which include the likes of Amazon, Google, Disney, Spotify, and Adobe. Recent insider buying also points to long term optimism; in September and October of this year, CEO Muskovitz purchased $123 million worth of stock at a price of roughly $100 per share.<\/span> Conclusion<\/b><\/p>\n <\/p>\n Based upon growth opportunities and company fundamentals, Asana is a great long-term investment for an aggressive growth portfolio. However, given that it\u2019s currently trading at inflated multiples and large swings in stock price are to be expected throughout the next year, Asana\u2019s current stock price justifies a hold consensus.\u00a0<\/span><\/p>\n <\/p>\n Sources:<\/span><\/p>\n https:\/\/nira.com\/asana-history\/<\/span><\/p>\n https:\/\/seekingalpha.com\/article\/4461129-asana-stock-forecast-the-danger-below<\/span><\/a><\/p>\n https:\/\/www.fool.com\/investing\/2020\/10\/14\/why-you-must-keep-asana-on-your-watchlist\/<\/span><\/a><\/p>\n https:\/\/akfpartners.com\/growth-blog\/Why-tech-and-product-leaders-need-to-think-about-gross-margins#:~:text=Many%20software%20companies%20today%20have,product%20market%20fit%20is%20achieved<\/span><\/a>.<\/span><\/p>\n https:\/\/techcrunch.com\/2021\/09\/17\/the-value-of-software-revenue-may-have-finally-stopped-rising\/<\/span><\/a><\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Asana Enterprise (NYSE: ASAN) Price (as of 11\/21\/2021): $100.75 Market Cap: 18.54B Daniel Chang Asana–The Next SaaS Headliner? Company Overview Asana Enterprise was founded in 2008 by Facebook veterans co founder Dustin Muskovitz and engineering lead Justin Rosenstein. It\u2019s one of the up and coming small cloud based companies riding on the Read more about Asana – The Next SaaS Headliner?<\/span>[…]<\/a><\/p>\n","protected":false},"author":2675,"featured_media":550,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[34],"tags":[],"class_list":["post-547","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-fall-2021"],"acf":[],"_links":{"self":[{"href":"https:\/\/sites.williams.edu\/williamsinsight\/wp-json\/wp\/v2\/posts\/547","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sites.williams.edu\/williamsinsight\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sites.williams.edu\/williamsinsight\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sites.williams.edu\/williamsinsight\/wp-json\/wp\/v2\/users\/2675"}],"replies":[{"embeddable":true,"href":"https:\/\/sites.williams.edu\/williamsinsight\/wp-json\/wp\/v2\/comments?post=547"}],"version-history":[{"count":2,"href":"https:\/\/sites.williams.edu\/williamsinsight\/wp-json\/wp\/v2\/posts\/547\/revisions"}],"predecessor-version":[{"id":551,"href":"https:\/\/sites.williams.edu\/williamsinsight\/wp-json\/wp\/v2\/posts\/547\/revisions\/551"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/sites.williams.edu\/williamsinsight\/wp-json\/wp\/v2\/media\/550"}],"wp:attachment":[{"href":"https:\/\/sites.williams.edu\/williamsinsight\/wp-json\/wp\/v2\/media?parent=547"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sites.williams.edu\/williamsinsight\/wp-json\/wp\/v2\/categories?post=547"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sites.williams.edu\/williamsinsight\/wp-json\/wp\/v2\/tags?post=547"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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