Asana, Inc. (ASAN): A Bull Case Theory

We came across a bullish thesis on Asana, Inc. on Compounding Your Wealth’s Substack by Sergey. In this article, we will summarize the bulls’ thesis on ASAN. Asana, Inc.'s share was trading at $10.25 as of January 30th. ASAN’s forward P/E was 28.17 according to Yahoo Finance.

Asana, Inc., together with its subsidiaries, operates a work management software platform for individuals, team leads, and executives in the United States and internationally. ASAN is demonstrating meaningful progress on financial discipline while operating in a constrained growth environment, positioning AI as the key mechanism to reshape its monetization model over time. In Q3 FY2026, revenue reached $201 million, growing 9% year over year and exceeding guidance, while non-GAAP operating income rose to $16.3 million, delivering an 8% margin and a notable 12-point improvement from the prior year.

Adjusted free cash flow totaled $13.4 million, or a 7% margin, reflecting disciplined cost management and operating leverage on an 89% gross margin. Management raised full-year revenue guidance to $789–$791 million, maintaining high-single-digit growth expectations, and increased full-year operating margin guidance to 7%. RPO growth of 23% year over year to $500.9 million improved revenue visibility despite muted near-term expansion.

Asana’s competitive positioning continues to center on cross-functional work management in environments where workflows are unstructured and span multiple departments, areas where CRM- or ITSM-native tools often struggle with context. Enterprise adoption remains a bright spot, with customers spending over $100,000 annually growing 15% year over year to 785, while international revenue increased 12%, outpacing U.S. growth and adding geographic diversification.

However, seat-based pressure persists, particularly in technology customers, keeping net revenue retention below 100% at 96%, even as in-quarter retention has improved for a second consecutive period and appears to be stabilizing. SMB acquisition remains challenged by LLM-driven disruption to search and paid media, while ongoing tech layoffs continue to weigh on seat counts.

Agentic AI represents the core long-term catalyst. AI Studio has shown sequential bookings growth and early self-serve traction, positively influencing renewals, while AI Teammates has entered beta with roughly 30 customers and is expected to reach general availability next year. While AI-driven revenue contribution remains modest in the near term, management expects a more material impact in FY2027 as adoption scales, shifting Asana toward a more consumption-oriented model that reduces dependence on seat expansion while sustaining margin improvement.

Previously, we covered a bullish thesis on Atlassian Corporation (TEAM) by Deep Value Returns in May 2025, which highlighted the company’s resilient free cash flow engine, long-term growth ambitions, Rule of 40 guidance of approximately 50%, and management’s goal of achieving 20% CAGR through fiscal 2027. TEAM’s stock price has depreciated by approximately 43.15% since our coverage due to broader software market volatility. Sergey shares a similar perspective but emphasizes Asana’s financial discipline, AI-driven monetization, and seat-based growth pressures in a constrained environment.

Asana, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 28 hedge fund portfolios held ASAN at the end of the third quarter which was 29 in the previous quarter. While we acknowledge the risk and potential of ASAN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ASAN and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.