We value ASAN based on our regression analysis utilizing a mix of a Rule of 40 framework and a 70/30 weighted average, with 70% weight on revenue growth and 30% weight on FCF margin. This mix suggests a 5.1x FY27E EV/revenue multiple to which we apply 8% discount to arrive at 4.7x multiple to drive our $17 TP.

Based on a short and volatile trading history, we see ASAN shares as High Risk.

Factors that may limit ASAN shares achieving our TP include: a potential recession scenario limiting IT budgets; Asana's software may be seen as a nice-to-have solutions set and fall out of favor in a potential recession; Asana has elevated exposure to Europe and to tech startups, which have been more negatively impacted recently; and Asana has a history of losses and may remain unprofitable, which may be increasingly out of favor by investors in a recession.

Upside risks include: investor preference may return to high-growth software companies; and the ownership structure could create a more volatile trading environment.