StockStory Flags Zeta Global Over Asana and Autodesk

StockStory has identified Zeta Global as a standout software stock while recommending investors avoid Asana and Autodesk. The analysis, which covers a sector that has gained 56.3% over the past six months, contrasts the three companies based on their growth metrics and valuation profiles.

Zeta Global, a data-driven cloud platform with a market capitalization of $8.48 billion, stands out in the report due to its strong billings growth. The company’s billings have averaged 38.7% over the last year, and its expected revenue growth of 24.6% is described as robust. StockProject anticipates that Zeta Global’s free cash flow margin will expand by 1.5 percentage points over the next year, providing flexibility for investments and share buybacks or dividends. The stock currently trades at $33.79 per share, valuing the company at 4.4 times forward price-to-sales.

In contrast, Asana, which provides a work management platform and has a market capitalization of $2.26 billion, is flagged as risky. The report cites underwhelming annual recurring revenue growth of 9.5% over the last year and a net revenue retention rate of 96.5%, which suggests high customer turnover. Asana’s intricate integration requirements for enterprise clients are noted to trigger long sales cycles that limit new customer additions. The stock is trading at $9.79 per share, or 2.6 times forward price-to-sales.

Autodesk, a provider of software solutions for architecture, engineering, and construction with a market capitalization of $48.16 billion, is also advised against. Although the company posted 14% annual revenue growth over the last five years, StockStory characterizes this pace as tepid for a software company benefiting from secular tailwinds. The report points to long payback periods on sales and marketing expenses as a signal of a highly competitive environment. Additionally, Autodesk’s free cash flow margin is forecasted to shrink by 4.4 percentage points in the coming year, indicating increased capital consumption to maintain competitiveness. Autodesk shares are priced at $230.21, trading at 5.6 times forward price-to-sales.