Duolingo (NASDAQ:DUOL) Hits New 12-Month Low - Should You Sell?

Key Points

• Duolingo (NASDAQ:DUOL) hit a new 52-week low, trading as low as $91.61 (last ~$93.60) amid several analyst price-target cuts—Needham and Barclays notably slashed targets—and the consensus rating remains a Hold with a $206.32 average target.
• The company delivered a strong quarter, beating EPS estimates ($0.91 vs. $0.79) with revenue up 35% year-over-year and a robust net margin (~39.9%), while valuation metrics show a PE of 11.08 and PEG of 0.69.
• Insiders have been net sellers recently (about 14,939 shares worth $1.68M sold in the past three months) even though institutional investors own roughly 91.6% of the stock.

Shares of Duolingo, Inc. (NASDAQ:DUOL - Get Free Report) hit a new 52-week low during trading on Friday . The company traded as low as $91.61 and last traded at $93.6020, with a volume of 450844 shares changing hands. The stock had previously closed at $98.11.

Analysts Set New Price Targets

A number of equities research analysts have recently issued reports on DUOL shares. Needham & Company LLC cut their price objective on shares of Duolingo from $300.00 to $145.00 and set a "buy" rating for the company in a research report on Friday, February 27th. Barclays decreased their target price on Duolingo from $230.00 to $110.00 and set an "equal weight" rating on the stock in a report on Monday, March 2nd. Zacks Research lowered Duolingo from a "hold" rating to a "strong sell" rating in a report on Monday, March 2nd. BMO Capital Markets upgraded Duolingo to a "buy" rating in a research report on Monday, January 12th. Finally, Scotiabank reaffirmed a "sector perform" rating and issued a $100.00 price objective (down from $300.00) on shares of Duolingo in a research note on Friday, February 27th. Four analysts have rated the stock with a Buy rating, seventeen have given a Hold rating and two have given a Sell rating to the stock. According to MarketBeat, Duolingo currently has an average rating of "Hold" and a consensus price target of $206.32.

Duolingo Stock Performance

The company has a market cap of $4.36 billion, a PE ratio of 11.08, a PEG ratio of 0.69 and a beta of 0.90. The company has a current ratio of 2.61, a quick ratio of 2.61 and a debt-to-equity ratio of 0.07. The business's 50 day moving average is $115.82 and its two-hundred day moving average is $195.81.

Duolingo (NASDAQ:DUOL - Get Free Report) last posted its quarterly earnings results on Thursday, February 26th. The company reported $0.91 EPS for the quarter, beating analysts' consensus estimates of $0.79 by $0.12. The business had revenue of $282.87 million for the quarter, compared to analysts' expectations of $275.95 million. Duolingo had a return on equity of 14.88% and a net margin of 39.91%.The firm's quarterly revenue was up 35.0% on a year-over-year basis. On average, equities research analysts anticipate that Duolingo, Inc. will post 2.03 EPS for the current year.

Insider Activity at Duolingo

In other Duolingo news, insider Robert Meese sold 1,000 shares of the stock in a transaction that occurred on Tuesday, February 17th. The shares were sold at an average price of $110.06, for a total transaction of $110,060.00. Following the completion of the sale, the insider directly owned 122,636 shares of the company's stock, valued at $13,497,318.16. This trade represents a 0.81% decrease in their position. The sale was disclosed in a filing with the SEC, which is available through the SEC website. Also, General Counsel Stephen C. Chen sold 1,901 shares of Duolingo stock in a transaction that occurred on Wednesday, February 18th. The shares were sold at an average price of $113.26, for a total transaction of $215,307.26. Following the sale, the general counsel owned 30,545 shares in the company, valued at approximately $3,459,526.70. The trade was a 5.86% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders have sold 14,939 shares of company stock worth $1,676,291 in the last three months. Corporate insiders own 15.67% of the company's stock.

Hedge Funds Weigh In On Duolingo

Several institutional investors have recently bought and sold shares of the stock. EFG International AG purchased a new stake in Duolingo in the 4th quarter worth $26,000. Atlantic Union Bankshares Corp purchased a new position in shares of Duolingo during the third quarter valued at about $32,000. AlphaCentric Advisors LLC bought a new stake in shares of Duolingo in the fourth quarter worth about $33,000. Farther Finance Advisors LLC increased its holdings in shares of Duolingo by 82.2% in the third quarter. Farther Finance Advisors LLC now owns 133 shares of the company's stock worth $43,000 after purchasing an additional 60 shares during the last quarter. Finally, Caitong International Asset Management Co. Ltd purchased a new stake in shares of Duolingo in the fourth quarter worth about $43,000. 91.59% of the stock is owned by hedge funds and other institutional investors.

About Duolingo

Duolingo, Inc NASDAQ: DUOL is a technology-driven education company that operates a widely used language-learning platform. Founded in 2011 by Luis von Ahn and Severin Hacker, Duolingo offers a freemium service featuring bite-sized lessons, gamified exercises and adaptive learning algorithms. The company's core product is its mobile and web application, which supports instruction in more than 40 languages, ranging from widely spoken tongues such as English and Spanish to lesser-taught options including Irish and Swahili.

In addition to its flagship language courses, Duolingo has expanded its product suite to include the Duolingo English Test, an on-demand, computer-based English proficiency exam designed for academic and professional admissions.

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