The Selloff In Duolingo Is An Opportunity, Maintaining Buy

Core Viewpoint - Duolingo's stock experienced a significant decline of 17%, dropping from $376 to$311 following the earnings report on February 28, 2025, primarily due to lower adjusted EPS guidance for Q1-2025 and Q2-2025, indicating modest growth expectations [1] Financial Performance - The adjusted EPS guidance for Q1-2025 is set at $0.59, while Q2-2025 is projected at$0.58, reflecting year-over-year growth rates of only 4% and 13% respectively [1] Strategic Initiatives - Management has indicated a strategy of front-loading AI expenses to enhance product offerings and drive revenue growth for the year 2025 [1]