Duolingo shares fall by 30% – analyzers still see potential News ad

Just a few weeks ago, Duolingo Inc. Nasdak: Nearby Since August, he flew high, by 200% and installed fresh maximums for all the time in February. Now the technological company has decreased by more than 30% in two weeks, and it approaches the key support levels that can make this a turning point.

Most of the damage occurred at the last two trading sessions after the income report last Thursday. Investors sharply reacted to the catastrophic 40% Mass Mass, which overshadowed the rest of the strong income.

The shares have now returned all their successes since October, and the market reaction suggests that expectations have become too high.

But taking into account the fact that the analysts doubled their prospects, the question: is the sale went too far?

Wall -Strite is focused on the wrong issue

Duolingo’s income report was not bad. In fact, the growth of income was exceptional. The company published 38% compared to last year income, which is due to the reliable growth of users, since more and more people interact with the Duolingo platform and a higher level of conversion into paid subscriptions, a key indicator for long -term stability.

These are strong numbers according to any standards, and they strengthen the idea that the Duolingo business is still growing quickly. Nevertheless, Wall Scheeter was recorded by one number – profit per share (EPS).

Analysts expected that EPS would be 0.48 US dollars, but instead Duolingo delivered only 0.28 US dollars-40% of the miss, mainly due to higher operating expenses. The recreation in the market suggests that investors were not ready for such a large Miss earnings after a large -scale rally rally.

But the real question is whether it was a one -time stumbling or a sign of deeper problems. If the company can tighten expenses in the next quarter, moods can change quickly, especially considering that the main story of the company’s growth remains strong.

Analysts in the course of seeing large draws

Despite sales after profit, Wall Street analysts do not retreat.

Since earnings last week, Barclays, Jpmorgan Chase and Piper Sandler have all confirmed the purchase ratings, with price purposes have reached $ 410.

This is 38% of growth compared to the closing price on Monday of $ 295, which will put Duolingo back to its record maximums.

When several best analysts confirm their bull prospects after a major sale, it is often a sign that the basics remain untouched and that the market can be excessive.

Analysts clearly look at Miss income and concentrate on the long -term growth of the company’s revenue and the expansion of subscribers.

Why technical data suggest that the rebound may be inevitable

From a technical point of view, Duolino looks extremely resold. RSI is only 28 years old, a level that historically signals the potential for a sharp rebound.

The shares currently re -retreated to the October level, the price range, which previously acted as support before the start of a large rally. If buyers enter this area, the next step can be a rapid recovery caused by traders who are looking for resold rebound, short sellers who make a profit after a recent collapse, or institutions continuing to accumulate with a discount.

If the action finds support and stabilizes, the next step can be a quick rebound to the range of 330–350 US dollars, before the market revises the growth potential of Duolingo in the next income cycle.

What should happen next

In order for Duolingo to maintain recovery will have to prove to investors that Miss income in the last quarter was a release. This means that in the next income report, this means improving cost control, continuing to increase income and avoid further compression of the margin, which may cause concern about profitability.

If Duolingo can deliver a cleaner imprint of income in the next quarter, there is every reason to believe that this sale was only a blow on the road, and not a sign of deeper problems.

The market punished Duolingo sharply for his Miss earnings, but analysts and technical data suggest that this sale may have gone too far. Due to the fact that the growth of income is still developing, analysts occupying a company in bull ratings, and the shares are now deeply resold, there is a good case of a sharp recovery.

For those who want to catch high growth with a discount, this may be one of the best points of the entry for months.

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