Is It Too Late To Consider Buying Asana, Inc. (NYSE:ASAN)?

Asana, Inc. (NYSE:ASAN), might not be a large cap stock, but it received a lot of attention from a substantial price increase on the NYSE over the last few months. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s take a look at Asana’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for Asana

What's The Opportunity In Asana?

Asana appears to be overvalued by 35% at the moment, based on my discounted cash flow valuation. The stock is currently priced at US$17.48 on the market compared to my intrinsic value of $12.95. Not the best news for investors looking to buy! But, is there another opportunity to buy low in the future? Given that Asana’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of Asana look like?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Asana's earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has well and truly priced in ASAN’s positive outlook, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe ASAN should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on ASAN for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for ASAN, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you'd like to know more about Asana as a business, it's important to be aware of any risks it's facing. While conducting our analysis, we found that Asana has 2 warning signs and it would be unwise to ignore them.

If you are no longer interested in Asana, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.