Adobe, Chewy, and Duolingo Are Trading at Multi-Year Lows and Could Be Contrarian Buys

The Motley Fool··Read original
2▲0 ▼0Impact / 5
Summary · why it matters

Adobe, Chewy, and Duolingo have seen their stock prices fall to levels not seen in years, presenting potential contrarian buying opportunities. Adobe is down 66% over five years and trades at just eight times forward earnings, yet it posted record revenue of $6.6 billion in its latest quarter, up 13% year over year. Chewy has dropped 77% in five years but grew net sales nearly 8% to $3.4 billion and net income 52% to $95 million, with a forward price-to-earnings ratio of 12. Duolingo lost over 70% in the past 12 months, but daily active users rose 21% to 56.5 million and revenue increased 27% to $292 million, giving it a forward P/E of under 19.

Impact on assets 3

Consumer Discretionary▲ · 2 stocks
Chewy Inc
CHWY
± MixedCapitalrelevance

Stock down 77% in five years but net sales and net income grew; low P/E of 12; contrarian buy thesis.

Duolingo Inc
DUOL
± MixedCapitalrelevance

Stock lost over 70% in 12 months but DAU rose 21% and revenue up 27%; low forward P/E; contrarian buy thesis.

Artificial Intelligence▲ · 1 stocks
Adobe Systems Incorporated
ADBE
± MixedCapitalrelevance

Stock at multi-year low and low P/E, but record revenue and growth suggest potential value; contrarian buy thesis.

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