Asana is nearing a buy point just days before the company reports January-quarter results.
The software maker will release its quarterly report on Thursday. Management gave a sales forecast of $150.5 million for the quarter, which would represent a 24.5% increase from the previous year.
Analysts polled by FactSet also gave a consensus sales expectation of $150.5 million with a loss of 18.5 cents per share.
While the company has yet to make a profit, sales growth has been outstanding.
Fiscal fourth quarter sales rose 34% to $150.2 million, while the loss per share of 15 cents was an improvement from the 25-cent loss a year ago.
Free cash flow remained in negative territory but improved to negative $26.5 million from negative $41.2 million a year ago.
For the fiscal year ending in January, sales grew 45% to $547.2 million while a loss of $1.04 per share was steeper than fiscal 2022's 92 cents. On the positive side, the number of customers spending $100,000 or more annualized rose 49% in the fourth quarter.
Shares surged on March 9 after the most recent quarterly report and after CEO Dustin Moskovitz said he would buy 30 million shares of ASAN common stock.
The stock topped after that and began the current cup base. The buy point is 23.06, according to IBD MarketSmith chart analysis.
The stock's strongest point is its 92 Relative Strength Rating as shares try to emerge from a severe decline from a 145.79 peak in November 2021. The Composite Rating of 78 is below optimum levels while the EPS Rating of 34 reflect the company's losses.
Asana is in the enterprise software group, which holds 22nd place among IBD's 197 industry groups. The San Francisco-based company has over 139,000 customers using its subscription service for work flow management. Its footprint is much larger for its free service, which is used by businesses across 200 countries.
The software platform automates business processes to improve coordination across teams, setting strategic goals and tracking progress. It includes visualization aids to track projects. The company offers three subscription models: a free one, one for teams priced at $10.99 per user a month and another for businesses at $24.99 per user also on a monthly basis.
The growth stock has also been integrating AI features. In March, it announced three features that would enable decision making, resource identification and management and plan execution.
Asana AI helps automate repetitive tasks, predict potential glitches and errors and optimize workflows. It can also schedule meetings, send reminders and prioritize tasks.
Mutual funds own 42% of shares. Exchange traded funds hold the stock as well. The WisdomTree Cloud Computing ETF and the Direxion Moonshot Innovators ETF hold shares of ASAN.
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