This SaaS Stock Is Up 250% in 2021 — but It Could Still Be a Buy

Workplace collaboration software company Asana ( NYSE:ASAN ) has been one of the best-performing stocks in the tech sector recently, up by more than 250% in 2021 alone. In this Fool Live video clip, recorded on Oct. 4 , Fool.com contributors Rachel Warren and Matt Frankel, CFP, discuss why Asana might still be worth a look at its higher valuation. Where to invest $1,000 right now

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Rachel Warren: So, Asana, ticker symbol ASAN, very well-known company operating within the space of project management software. Shares of the company has seen tremendous growth here today. The stock has risen about 250% since January. The company just became publicly traded in October. Since that time, shares are up about 300%.

The software-as-a-service stocks, I think, have become increasingly popular with investors in recent years as more companies are relying on these businesses to get their work done and streamline operations. One type of software-as-a-service business model that’s been increasingly in demand with more companies going remote, just trying to streamline task since they organized or these work management platforms.

Asana was founded in 2008. It’s a little newer than a well-known competitor like an Atlassian , which is nearly 20-year-old company known for products like Trello. Another major competitor to Asana is Monday.com , which is even newer than Asana was founded in 2012 and just went public this last summer, I believe.

Asana, I rank at the top of this list for my personal preference. Partly because of the sector it’s in and partly because of the company. I think the software-as-a-service stock sector has so much potential just in this digital age that we live in. Then I also think Asana’s doing a really great job of meeting the needs of its customers in this really competitive space.

The project management software market is full of opportunity, was valued at more than $5 billion in 2020, and it’s supposed to hit a valuation of nearly $10 billion by the year 2026. A pretty big jump in just a six-year period. Asana task management software is available on web as well as mobile platform and you can create and share projects, break work up into tasks, assign tasks, you can create teams for projects. It has a million different integrations, everything from Microsoft Suite to Google Drive to Salesforce ( NYSE:CRM ).

One of the reasons a lot of customers tend to choose Asana over, perhaps some of the competitors, not only because it’s very easy to use, very user-friendly, I’ve used it myself, I have found it to definitely be that way. I mean, offers so many different integration. When you’re looking at software-as-a-service stocks like Asana and you’re viewing company like this in the context of its ability to provide long-term portfolio value, I think it’s a good idea to look at what companies are using its products and services.

You look at what customers it has. It gives you an idea of the stock staying power and how much room it has to grow in the industry that it’s been. Asana has a pretty impressive list of major name brands that use its management software. We’re talking about companies like Amazon , Google, Spotify , Roku , PayPal , Twitter , Adobe , the list goes on. It’s very impressive list of customers.

Another factor I like to look at when looking at a company is the company culture. A company is only so good as its leadership. This can be another way to see how a company is doing, not only keeping its customers happy, but keeping its employees happy, too. Earlier this year, Asana announced that for the second year in a row, they were named be No. 1 best workplace in technology, by Fortune and Great Place to Work. A few years ago, Great Place to Work also found that 96% of employees at Asana, think it’s a great place to work for us. Versus around 60% at your average company in the U.S.

Asana is growing its revenue at a very fast pace, 2020, which […]

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