Sometimes numbers say all that needs to be said. Take 23 for example, put it up and any sane basketball fan immediately thinks Jordan. Let’s try that again, 12 – some come to mind but there is only one 12, Tom Brady. Hockey is the fourth of the top four major sports, 99? Yes, that’s the great one, Gretzky. Soccer, 10 is the number of the best player on the team, that’s Pele.
Nobody ever wore $37,107,410, but that’s how much Asana, Inc. (ASAN) Chief Executive Officer (CEO) Dustin Moskovitz invested in his company last week. (1) Again, sometimes numbers say it all.
Asana is a leading work management platform that helps teams orchestrate their work, from daily tasks to strategic initiatives. Asana adds structure to unstructured work, creating clarity, transparency, and accountability to everyone within an organization—individuals, team leads, and executives—so they understand exactly who is doing what, by when.
The name, Dustin Moskovitz, might ring a bell as he is one of the less famous founders of Facebook, Inc. (FB). As you can imagine, Moskovitz’s pockets are overflowing thanks to his Facebook ownership. For a billionaire, $37 million might be small potatoes. However, since 2012, the CEO has either sold ASAN or FB stock or executed option-related trades.
Prior to last week, Moskovitz was a 100% seller for the last 10 years, netting $167 million in proceeds without buying $1 of stock as an insider. It makes the $37 million stick out more so.
Asana IPO’d in October 2020 at $27 per share, struggled at first before finding its footing. Oddly, it is reminiscent of Facebook’s early days as a publicly traded company. FB had a rough going out of the box before taking off.
Our biggest concern about Asana is they are not expected to be profitable for the foreseeable future. Wall Street projects a loss of -$1.01 per share (EPS) next year, only slightly better than this year’s forecasted loss of $-1.04. (2)
The minor bottom line improvement, if you can call it that, comes despite solid expectations for revenue growth. Wall Street sees sales of $436.5 million next year versus $338.7 million this year. That’s nearly a 29% year-over-year increase. One would expect to see more than three cents trickle to the bottom line with nearly a $100 million top line surge.
Asana is not cheap by any measure. For example, it trades at 29.68 times sales (P/S) (3). Whereas, the typical peer is valued at 9.3 times revenue. To create value for shareholder, ASAN’s top line will need to continue to expand at above average rates until the company turns a profit, which might be a while.
Overview: Past performance is no guarantee of future results… However, CEO Moskovitz’s prior success is a big one with Facebook. Buying shares of Asana when he can invest in literally anything on planet earth is a major plus, in our opinion. It’s especially attention worthy considering its his first and only insider buy.
Asana, Inc. (ASAN) could be appropriate for long-term tech investors with an above average taste for risk. We all know what happened with FB. History has 20/20 vision. That being said, if Moskovitz can have a fraction of the success with ASAN that he had with FB, it could be a significant winner.
1 – https://www.secform4.com/insider-trading/1549917.htm
2 – https://finance.yahoo.com/quote/ASAN/analysis?p=ASAN
3 – https://finance.yahoo.com/quote/ASAN/key-statistics?p=ASAN