Asana stock price forecast after issuing upbeat Q3 sales guidance

On Thursday, Asana Inc. (NYSE:ASAN) shares soared 13% after announcing another solid quarterly result. The company reported its fiscal Q2 revenue and earnings Wednesday after markets closed, smashing analyst expectations. 

Asana posted Q2 non-GAAP earnings per share of -$0.23, slightly better than the consensus Street estimate of -$0.26. On the other hand, GAAP earnings came in line with expectations at -$0.40 per share, while revenue of $89.5 million outperformed estimates by $7.24 million.

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The company’s cash flows from operations also improved significantly to -$8.5 million compared to -$22.1 from the same period a year ago.

Asana issued fiscal Q3 revenue guidance in the range of $93 million to $94 million, substantially better than the average analyst expectation of $86.68 million. The company now expects fiscal full-year 2022 revenue of $357-$359 million, representing 57%-58% growth, and better than the Street estimate of $338.88 million.

Should you buy or sell Asana shares after impressive Q2 results?

Although Asana issued better-than-expected Q3 and full-year 2022 revenue guidance, the stock seems substantially overvalued based on its price-sales ratio of 47.76. Moreover, its earnings growth projections are not exciting with analysts expecting EPS to fall by nearly 71% this year before rising 1.90% next year.

In addition, Asana faces strong competition from other workflow management companies, with Monday.com (NASDAQ:MNDY) and Trello parent Atlassian Corp (NASDAQ:TEAM) offering better growth prospects.

Therefore, investors could look for alternatives before betting on Asana shares.

Asana seems poised for a pullback

Technically, Asana shares appear to have surged closer to overbought conditions following Thursday’s post-earnings spike. Therefore, the stock price seems inevitably poised for a pullback.

As such, investors can target potential pullback profits at approximately $79.72 or lower at $72.15. On the other hand, if the surge continues, it could find support at about $93.31 or higher at $100.22.

Bottom line: it could be time to cash out on Asana

In summary, Thursday’s post-earnings gains pushed Asana shares up 200% this year. Therefore, it could be a perfect time to take profits ahead of an inevitable pullback. 

Moreover, with growth seemingly stunted compared to the competition, Asana shares could struggle to find a catalyst for a continued upward movement.

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