Investors should be willing to pay a premium for a quality stock, but that doesn't always mean you must pay a premium price.There's never a bad time to buy a good stock. A good stock is an even better buy, however, at a lower price.With that premise in mind against a backdrop of relatively steep valuations for most stocks, here's a closer look at three long-term prospects currently trading at bargain prices.1. DuolingoDuolingo (DUOL 6.03%) is one of those names that rings a bell, but you may not be exactly ...

Core Viewpoint - Duolingo's 70% stock price drop is seen as unjustified given its strong fundamentals and potential for significant returns, particularly as it prepares to report earnings on February 26 [1][9]. Company Performance - Duolingo's stock price fell from over $500 per share last year to approximately $100 per share, indicating an overreaction by the market [2]. - The company has over 50 million daily active users and reported a 41% year-over-year revenue growth in Q3 [8]. - The total number of paid subscribers increased by 34% year-over-year, reaching 11.5 million in Q3 [8]. Market Concerns - Investors are worried that advancements in AI could render Duolingo obsolete, especially with competitors like T-Mobile introducing features that translate languages in real-time [4][5]. - AI models such as ChatGPT and Grok are perceived as threats, as they can provide language learning resources and quizzes [5][7]. Industry Context - The fear surrounding AI's impact on language learning is not new, as AI technologies have been available for several years, and Duolingo has continued to grow despite these advancements [7]. - The fastest-growing subject on Duolingo's platform is chess, indicating diversification beyond traditional language learning [8].

Core Insights - Artificial intelligence (AI) is identified as the greatest investment opportunity of the current era, with a strong emphasis on the urgent need for energy to support its growth [1][2][3] Group 1: AI and Energy Demand - AI technologies, particularly large language models like ChatGPT, are extremely energy-intensive, with data centers consuming as much energy as small cities [2] - The increasing demand for AI is straining global power grids, leading to rising electricity prices and a need for utilities to expand capacity [2] - Industry leaders, including Sam Altman and Elon Musk, have highlighted the critical link between AI development and energy availability, warning of potential shortages [2] Group 2: Investment Opportunity - A specific company is positioned as a key player in the AI energy sector, owning critical energy infrastructure assets that will benefit from the anticipated surge in energy demand from AI data centers [3][7] - This company is not a chipmaker or cloud platform but is described as a "toll booth" operator in the energy market, profiting from the increasing need for electricity [5][6] - The company is debt-free and has significant cash reserves, equating to nearly one-third of its market capitalization, making it an attractive investment option [8] Group 3: Market Position and Growth Potential - The company is involved in large-scale engineering, procurement, and construction (EPC) projects across various energy sectors, including nuclear energy, which is crucial for America's future power strategy [7] - It has a substantial equity stake in another AI-related company, providing investors with indirect exposure to multiple growth opportunities without high premiums [9] - The stock is currently undervalued, trading at less than seven times earnings, which presents a compelling investment case [10] Group 4: Broader Economic Context - The company is well-positioned to benefit from the onshoring trend driven by tariffs, as American manufacturers are encouraged to bring operations back home [5][14] - The surge in U.S. LNG exports is expected to further enhance the company's market position under the current administration's energy policies [7][14] - The influx of talent into the AI sector is anticipated to drive continuous innovation and advancements, reinforcing the long-term growth potential of investments in AI [12]

Core Insights - Duolingo's stock has declined 28% since the third-quarter earnings report, despite exceeding revenue and subscriber expectations, primarily due to weak fourth-quarter guidance [1][6] - The decline in stock price presents a buying opportunity as the company continues to show strong user retention and subscription revenue growth [2][10] Financial Performance - Duolingo reported a 46% year-over-year increase in subscription revenue, reaching $229 million, indicating high customer satisfaction [5] - Total bookings increased by 33% year-over-year in Q3, but the guidance for Q4 projects a lower growth rate of 21.3% to 23.5% [6] - The company ended the quarter with 135 million monthly active users, a 20% year-over-year increase, and 50 million daily active users, a 36% year-over-year increase [4][10] Market Position - Investors are concerned about competition from ChatGPT and other chatbots, but Duolingo continues to retain users who are increasingly using the app daily [9][10] - The company's strategy focuses on growing user numbers rather than maximizing short-term revenue, which is reflected in the lower guidance [6][10] Valuation - Following the stock's decline, Duolingo's shares are trading at a price-to-free-cash-flow multiple of 26, which is considered attractive given the company's 52% year-over-year growth in trailing-12-month free cash flow [10]