Asana drops as RBC downgrades, citing worries over recession, cash burn and competition
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Asana (NYSE:ASAN) shares fell on Tuesday as investment firm RBC Capital downgraded the work management software company for several reasons, including worries over a potential recession and the company's inability to generate cash. 
Analyst Rishi Jaluria lowered his rating on Asana (ASAN) shares to underperform, noting that the company's software is seen as "discretionary," while also noting that project management is not considered a "large" total addressable market.
In addition, there are worries over competition, as well as the "worrisome" cash burn and the fact the time it will take Asana (ASAN) to become profitable is now unclear.
"Asana scores low on our five-factor recession framework, and we believe Asana will be disproportionately impacted, owing to its lack of profitability, high startup exposure, and more discretionary nature of its software (in our view)," Jaluria wrote in a note to clients.
Asana (ASAN) shares fell more than 4.5% to $16.72 in premarket trading. 
In addition, Jaluria noted that he has spoken to customers who like the product, but it is not widely used outside of tech companies and Asana (ASAN) has been described as a âSilicon Valley solution to a Silicon Valley problem.â
Asana (ASAN) competes with companies like Monday.com (MNDY), Smartsheet, Airtable and Clickup and other larger companies such as Adobe (ADBE), Citrix (CTXS) and Atlassian (TEAM). 
Jaluria also estimates that Asana (ASAN) will go through more than 60% of its cash in the next four quarters and while CEO and co-founder Dustin Moskovitz could support the business, thanks to his enormous net worth, this is not seen "as a sustainable business model."
Analysts have been positive on Asana (ASAN). It had an average rating of BUY from Seeking Alpha authors, while Wall Street analysts are also positive on it and rate it a BUY. Conversely, Seeking Alpha's quant system, which consistently beats the market, rates ASAN a STRONG SELL.