Duolingo (NASDAQ:DUOL) Shares Gap Down After Analyst Downgrade

Key Points

• Duolingo shares gapped down after Citigroup lowered its price target from $400 to $375, with the stock opening at $267.79, significantly lower than its previous close of $280.74.
• Despite the downgrade, Duolingo maintains a majority favorable rating from analysts, with twelve analysts assigning a "Buy" rating and one analyst giving a "Sell" rating.
• Recent insider trading activity revealed significant stock sales by executives, with multiple insiders reducing their holdings, signaling potential concerns about future performance.

Duolingo, Inc. (NASDAQ:DUOL - Get Free Report)'s share price gapped down before the market opened on Wednesday after Citigroup lowered their price target on the stock from $400.00 to $375.00. The stock had previously closed at $280.74, but opened at $267.79. Citigroup currently has a buy rating on the stock. Duolingo shares last traded at $271.53, with a volume of 713,493 shares traded.

A number of other equities analysts have also commented on DUOL. DA Davidson lowered Duolingo from a "buy" rating to a "neutral" rating and cut their price objective for the stock from $500.00 to $300.00 in a research note on Thursday, September 4th. Zacks Research raised Duolingo from a "hold" rating to a "strong-buy" rating in a research report on Monday, September 8th. Robert W. Baird initiated coverage on Duolingo in a research report on Friday, September 5th. They set a "neutral" rating and a $280.00 target price on the stock. KeyCorp raised Duolingo from a "sector weight" rating to an "overweight" rating and set a $460.00 target price on the stock in a research report on Monday, August 18th. Finally, Wells Fargo & Company initiated coverage on Duolingo in a research report on Monday, September 8th. They set an "underweight" rating and a $239.00 target price on the stock. One analyst has rated the stock with a Strong Buy rating, twelve have given a Buy rating, nine have issued a Hold rating and one has issued a Sell rating to the stock. According to MarketBeat.com, Duolingo has an average rating of "Moderate Buy" and a consensus price target of $419.32.

Insider Buying and Selling at Duolingo

In related news, General Counsel Stephen C. Chen sold 1,515 shares of the business's stock in a transaction that occurred on Tuesday, August 26th. The stock was sold at an average price of $321.36, for a total value of $486,860.40. Following the transaction, the general counsel directly owned 32,638 shares of the company's stock, valued at approximately $10,488,547.68. The trade was a 4.44% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Also, insider Natalie Glance sold 2,533 shares of the firm's stock in a transaction on Friday, August 15th. The stock was sold at an average price of $329.03, for a total value of $833,432.99. Following the completion of the sale, the insider owned 122,112 shares of the company's stock, valued at approximately $40,178,511.36. This represents a 2.03% decrease in their ownership of the stock. The disclosure for this sale can be found here. Over the last quarter, insiders sold 70,508 shares of company stock worth $23,716,221. 15.67% of the stock is owned by corporate insiders.

Institutional Trading of Duolingo

Hedge funds and other institutional investors have recently bought and sold shares of the business. Jefferies Financial Group Inc. purchased a new stake in Duolingo in the first quarter worth $3,772,000. Hsbc Holdings PLC grew its position in shares of Duolingo by 39.0% during the 1st quarter. Hsbc Holdings PLC now owns 3,186 shares of the company's stock worth $995,000 after buying an additional 894 shares in the last quarter. Encompass More Asset Management bought a new position in shares of Duolingo during the 1st quarter worth $762,000. Jump Financial LLC boosted its position in Duolingo by 563.7% during the first quarter. Jump Financial LLC now owns 104,693 shares of the company's stock valued at $32,511,000 after purchasing an additional 88,918 shares in the last quarter. Finally, Silvant Capital Management LLC bought a new stake in Duolingo during the first quarter valued at about $1,946,000. Hedge funds and other institutional investors own 91.59% of the company's stock.

Duolingo Stock Performance

The business has a 50-day moving average of $327.64 and a two-hundred day moving average of $378.39. The company has a market cap of $13.33 billion, a P/E ratio of 119.71, a P/E/G ratio of 1.94 and a beta of 0.85. The company has a debt-to-equity ratio of 0.10, a current ratio of 2.81 and a quick ratio of 2.81.

Duolingo (NASDAQ:DUOL - Get Free Report) last issued its quarterly earnings data on Wednesday, August 6th. The company reported $0.91 earnings per share for the quarter, beating analysts' consensus estimates of $0.55 by $0.36. Duolingo had a return on equity of 13.32% and a net margin of 13.24%.The company had revenue of $252.27 million for the quarter, compared to the consensus estimate of $240.84 million. During the same quarter last year, the company earned $0.51 earnings per share. The firm's revenue for the quarter was up 41.5% compared to the same quarter last year. On average, sell-side analysts predict that Duolingo, Inc. will post 2.03 EPS for the current fiscal year.

Duolingo Company Profile

Duolingo, Inc operates as a mobile learning platform in the United States, the United Kingdom, and internationally. The company offers courses in 40 different languages, including Spanish, English, French, German, Italian, Portuguese, Japanese, and Chinese through its Duolingo app. It also provides a digital English language proficiency assessment exam.