Asana Earnings: Macro Pressures Weigh on Seat Expansion and Damp Near Term Growth

No-moat Asana reported mixed fourth-quarter and full-year fiscal 2024 results that marginally exceeded our topline and profitability expectations. The firm's performance throughout the year was hindered by challenging macroeconomic conditions, elevated budget scrutiny and workforce reductions, amplified by the firm's exposure to the technology sector and SMB customers. Together this cumulated in weak seat expansion as illustrated by dollar-based net retention deteriorating to 100% at year-end, from 115% in the prior corresponding period, and top-line growth more than halving relative to the prior year. Following the result, we maintain our longer-term forecasts but raise our fair value estimate to $18 from $17.50 on time value of money. At current prices, Asana shares screen as fairly valued on a risk-adjusted basis.