Duolingo (NASDAQ:DUOL) Rating Increased to Strong-Buy at UBS Group

Key Points

• UBS Group upgraded Duolingo to “strong buy,” although the broader analyst consensus remains “hold” with an average price target of $148.12.
• Duolingo exceeded quarterly expectations, reporting adjusted EPS of $0.66 versus $0.60 expected and revenue of $298.45 million, up 18.3% year over year.
• Despite strong user and earnings growth, weaker-than-expected revenue guidance raised concerns about slowing expansion and contributed to a sharp post-earnings selloff.

Duolingo (NASDAQ:DUOL - Get Free Report) was upgraded by analysts at UBS Group to a "strong-buy" rating in a report issued on Thursday,Zacks.com reports.

A number of other equities analysts also recently issued reports on DUOL. KeyCorp reissued a "sector weight" rating on shares of Duolingo in a research report on Thursday, June 4th. Jefferies Financial Group lifted their price objective on Duolingo from $95.00 to $125.00 and gave the company a "hold" rating in a report on Tuesday, July 14th. Zacks Research raised shares of Duolingo from a "strong sell" rating to a "hold" rating in a research note on Tuesday, April 28th. Morgan Stanley increased their target price on shares of Duolingo from $95.00 to $125.00 and gave the stock an "equal weight" rating in a report on Thursday, July 16th. Finally, Wall Street Zen cut shares of Duolingo from a "hold" rating to a "sell" rating in a report on Saturday. One research analyst has rated the stock with a Strong Buy rating, two have given a Buy rating, eighteen have assigned a Hold rating and two have given a Sell rating to the company's stock. According to data from MarketBeat.com, Duolingo currently has an average rating of "Hold" and a consensus target price of $148.12.

Duolingo Stock Up 6.8%

Shares of NASDAQ DUOL opened at $130.90 on Thursday. The company has a debt-to-equity ratio of 0.06, a quick ratio of 2.62 and a current ratio of 2.72. The firm has a market capitalization of $6.10 billion, a price-to-earnings ratio of 15.51, a PEG ratio of 0.95 and a beta of 0.87. The stock has a 50 day moving average price of $125.76 and a 200 day moving average price of $115.10. Duolingo has a 52-week low of $87.89 and a 52-week high of $415.76.

Duolingo (NASDAQ:DUOL - Get Free Report) last released its quarterly earnings data on Wednesday, August 5th. The company reported $0.66 EPS for the quarter, topping the consensus estimate of $0.60 by $0.06. The company had revenue of $298.45 million for the quarter, compared to the consensus estimate of $295.58 million. Duolingo had a return on equity of 12.10% and a net margin of 35.88%.Duolingo's quarterly revenue was up 18.3% on a year-over-year basis. During the same period last year, the business posted $0.91 EPS. Sell-side analysts expect that Duolingo will post 2.76 earnings per share for the current year.

Insider Transactions at Duolingo

In related news, General Counsel Stephen C. Chen sold 1,977 shares of the stock in a transaction that occurred on Monday, May 18th. The shares were sold at an average price of $113.61, for a total transaction of $224,606.97. Following the completion of the sale, the general counsel owned 52,807 shares of the company's stock, valued at $5,999,403.27. This represents a 3.61% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, insider Robert Meese sold 1,420 shares of the firm's stock in a transaction that occurred on Friday, May 15th. The shares were sold at an average price of $112.16, for a total transaction of $159,267.20. Following the completion of the sale, the insider owned 170,745 shares of the company's stock, valued at approximately $19,150,759.20. This trade represents a 0.82% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold a total of 9,506 shares of company stock valued at $1,073,864 in the last 90 days. Insiders own 16.62% of the company's stock.

Hedge Funds Weigh In On Duolingo

Large investors have recently made changes to their positions in the business. Generali Investments Management Co LLC acquired a new stake in shares of Duolingo in the 2nd quarter worth $565,000. Everhart Financial Group Inc. acquired a new position in Duolingo during the 2nd quarter valued at about $313,000. FNY Investment Advisers LLC purchased a new stake in Duolingo in the second quarter valued at about $34,000. GAMMA Investing LLC raised its stake in Duolingo by 103.1% in the second quarter. GAMMA Investing LLC now owns 1,324 shares of the company's stock valued at $152,000 after buying an additional 672 shares during the last quarter. Finally, Pacer Advisors Inc. boosted its holdings in Duolingo by 416.0% in the first quarter. Pacer Advisors Inc. now owns 238,458 shares of the company's stock worth $23,505,000 after acquiring an additional 192,245 shares in the last quarter. 91.59% of the stock is owned by institutional investors and hedge funds.

Duolingo News Summary

Here are the key news stories impacting Duolingo this week:

• Positive Sentiment: Duolingo exceeded second-quarter expectations, reporting adjusted earnings of $0.66 per share versus consensus of roughly $0.60-$0.61, while revenue rose 18.3% year over year to $298.5 million, above the $295.6 million estimate. DUOL Q2 Earnings Beat Estimates on Strong User Growth
• Positive Sentiment: Daily active users increased 23% year over year, and paid subscribers continued to grow, reinforcing Duolingo’s long-term expansion strategy. Management also cited lower artificial-intelligence costs as a factor supporting profitability. Duolingo stock sinks 15% as Q3 revenue forecast misses expectations
• Positive Sentiment: Needham reaffirmed its Buy rating and set a $145 price target, while Truist raised its target to $120 from $100, indicating some analysts see value after the recent selloff. Analyst ratings and price targets
• Neutral Sentiment: Management is prioritizing engagement and user growth, targeting 100 million daily active users by 2028, but projected 2026 revenue growth of approximately 16% signals a materially slower pace than Duolingo’s historical expansion. Duolingo outlines 2026 revenue growth of approximately 16%
• Negative Sentiment: The main overhang is Duolingo’s third-quarter revenue forecast, which fell below Wall Street expectations. The guidance overshadowed the earnings and user-growth beats, prompting a sharp post-earnings selloff and raising concerns that the company’s growth engine is slowing. Duolingo posts better-than-expected sales but stock drops
• Negative Sentiment: Bank of America downgraded Duolingo to Underperform, and Truist’s Hold rating with a $120 target remains below the recent trading level, reflecting valuation and execution concerns. Bank of America downgrades Duolingo

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.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.

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