Asana Inc, a prominent player in the Software-Application industry, has shown a significant
financial performance that is worth considering for investment. The company's long-term debt stands at a manageable
46.7M, indicating a relatively low financial risk. However, it's worth noting that Asana reported a substantial loss of
407.8M in net income applicable to common shares, which may be a concern for potential investors. On a positive note, the company has demonstrated strong cash flow management. The total cash flows from investing activities amounted to
64.5M, and other cash flows from financing activities were recorded at
72.4M. This indicates that Asana has been effective in generating cash from its core business operations and financing activities. Despite a negative Jensen Alpha of -0.25, indicating underperformance relative to the market, the company's stock price has seen a 0.65% increase. This suggests that the market has a positive outlook on Asana's
future earnings. Investors should consider these factors and their own risk tolerance before deciding to invest in Asana Inc.
A deeper look at AsanaInc
Asana Inc. currently holds liabilities amounting to $271.54 million, with a Debt to Equity (D/E) ratio of 2.71. This suggests that Asana Inc. heavily relies on financing its operations through borrowing. The company's current ratio stands at 1.13, indicating potential challenges in meeting its financial obligations when they become due.
While debt can aid Asana Inc. until it encounters difficulties in repayment, either through raising new capital or generating free cash flow, there's a risk that shareholders could end up with nothing if the company fails to meet its legal debt repayment obligations.
However, it's more common for companies like Asana Inc. to issue additional shares at discounted prices, which results in dilution for existing shareholders. In this context, debt can be a highly effective tool for Asana Inc. to invest in growth at high rates of return.
When evaluating Asana Inc.'s use of debt, it's crucial to consider it in conjunction with cash and equity.
Asana financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Asana, including all of Asana's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Asana assets, the company is considered highly leveraged. Understanding the
composition and structure of overall Asana debt and outstanding corporate bonds gives a good idea of
how risky the capital structure of a business is and if it is worth investing in it. Please read more on our
technical analysis page.
Understanding Asana Total Debt
Asana Inc liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Asana Inc has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Asana balance sheet include debt obligations and money owed to different Asana vendors, workers, and loan providers. Below is the chart of Asana main long-term debt accounts currently reported on its balance sheet.
You can use Asana Inc
financial leverage analysis tool to get a better grip on understanding its financial position
How important is Asana's Liquidity
Asana
financial leverage refers to using borrowed capital as a funding source to finance Asana Inc ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Asana financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Asana's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Asana's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Asana's total debt and its cash.
Breaking down Asana Indicators
The small decline in market price for the last few months could raise concerns from insiders as the firm is trading at a share price of
21.63 on very low momentum in volume. The company executives did not add much value to AsanaInc investors in
August. However, diversifying your holdings with AsanaInc or similar stocks can still protect your portfolio during high-volatility market scenarios. The stock standard deviation of daily returns for 90 days investing horizon is currently 3.31. The above-average risk is mostly attributed to
market volatility and speculations regarding some of the upcoming earning calls from AsanaInc partners.
Liabilities Breakdown
278.5 M
Current Liabilities
291.9 M
Long-Term Liabilities
| Total Liabilities | 570.41 Million |
| Current Liabilities | 278.49 Million |
| Long-Term Liabilities | 291.92 Million |
Asana Inc, a prominent player in the Software-Application industry, has been under the microscope of investors as the October earnings season approaches. The company's
financial performance reveals a complex picture. Asana's net income from continuing operations stands at a significant loss of $407.8M, a figure that is mirrored in its EBIT of
-$407.8M. Despite these losses, the company maintains a healthy current ratio of 1.15X, suggesting it can meet its short-term obligations.
The company's total operating expenses are high, reaching
$898.5M, with selling and marketing expenses accounting for a substantial $435M. This high expenditure could be a contributing factor to the company's net losses. On the brighter side, Asana's gross profit stands at $398.87M, indicating a strong revenue generation capacity. The company's total debt is $271.54M, with short and long-term debt totaling $271.5M. Despite this, Asana's net tangible assets amount to $356.6M, and the company has a significant $529.3M in cash and short-term investments. The company's market capitalization is $4.69B, with a price to sales ratio of 6.03X, suggesting the stock may be overvalued. In conclusion, while Asana's financial performance shows some areas of concern, particularly its net losses and high operating expenses, the company's strong gross profit and healthy current ratio indicate potential for future growth. Investors should carefully consider these factors in their October earnings projections. .
Possible October bounce back of AsanaInc?
Asana Inc. has recently undergone a significant drawdown, with the maximum reaching 17.82 as of today. While this decline may be alarming to some investors, it also presents a potential opportunity for a rebound. Given the company's historical resilience and broader market trends, there's a possibility that Asana could experience a recovery in October. Investors should closely monitor the stock's performance and consider the potential for a recovery when making their investment decisions. Asana Inc. exhibits very low volatility with a skewness of 0.43 and a kurtosis of 0.84. However, we recommend investors to further study Asana Inc.'s technical indicators to ensure that all market information is available and reliable. Understanding different
market volatility trends often assists investors in timing the market. Proper use of volatility indicators allows traders to measure Asana Inc.'s stock risk against market volatility during both bullish and bearish trends. The heightened level of volatility that accompanies bear markets can directly impact Asana Inc.'s stock price, adding stress to investors as they watch the value of their shares plummet. This typically prompts investors to rebalance their portfolios by purchasing different stocks as prices fall.
Our Takeaway on AsanaInc Investment
When is the right time to buy or sell AsanaInc? Buying stocks such as AsanaInc isn't very hard. However, what challenging for most investors is doing it at the right time. Proper
market timing is something most people cannot do without
sophisticated tools, which help to isolate the right opportunities, deliver winning trades and diversify portfolios on a daily basis.
To summarize, as of the 5th of September 2023, our research shows that AsanaInc is a rather not too volatile investment opportunity with a
low odds of financial turmoil in the next two years. From a slightly different view, the entity currently appears to be
fairly valued. Our primary 90 days buy-sell recommendation on the firm is
Hold.
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Aina Ster is a Member of Macroaxis Editorial Board. Aina delivers weekly perspective on ongoing market and economic trends, analysis and tips from predictive analysis to forecasting across various financial instruments.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Aina Ster do not own shares of Asana Inc. Please refer to our
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