Duolingo (NASDAQ:DUOL) Shares Gap Up After Strong Earnings

Key Points

• Duolingo shares surged nearly 33.9% after the company reported earnings of $0.91 per share, significantly exceeding analysts' expectations of $0.55.
• The company's revenue for the quarter rose to $252.27 million, marking a 41.5% increase from the same quarter last year and surpassing the consensus estimate of $240.84 million.
• Analysts maintain a Moderate Buy consensus for Duolingo, with an average price target of $451.87 and a mix of buy and hold ratings across various brokerages.

Duolingo, Inc. (NASDAQ:DUOL - Get Free Report) shares gapped up before the market opened on Thursday following a stronger than expected earnings report. The stock had previously closed at $343.61, but opened at $446.00. Duolingo shares last traded at $466.16, with a volume of 1,624,640 shares trading hands.

The company reported $0.91 EPS for the quarter, beating analysts' consensus estimates of $0.55 by $0.36. The company had revenue of $252.27 million during the quarter, compared to the consensus estimate of $240.84 million. Duolingo had a return on equity of 11.70% and a net margin of 11.93%. Duolingo's quarterly revenue was up 41.5% compared to the same quarter last year. During the same period in the previous year, the firm posted $0.51 earnings per share.

Analyst Ratings Changes

Several brokerages recently weighed in on DUOL. Piper Sandler set a $375.00 price objective on shares of Duolingo in a research report on Friday, May 2nd. Argus initiated coverage on Duolingo in a research note on Wednesday, June 25th. They set a "buy" rating and a $575.00 target price on the stock. JPMorgan Chase & Co. decreased their price target on Duolingo from $580.00 to $500.00 and set an "overweight" rating for the company in a research note on Thursday, July 17th. Barclays upped their target price on Duolingo from $375.00 to $390.00 and gave the stock an "equal weight" rating in a research report on Thursday. Finally, The Goldman Sachs Group lifted their price objective on shares of Duolingo from $340.00 to $403.00 and gave the stock a "neutral" rating in a research note on Monday, May 5th. Five investment analysts have rated the stock with a hold rating and eleven have given a buy rating to the stock. According to data from MarketBeat, Duolingo currently has a consensus rating of "Moderate Buy" and an average target price of $451.87.

Insider Buying and Selling at Duolingo

In other Duolingo news, insider Severin Hacker sold 10,000 shares of the firm's stock in a transaction dated Monday, July 21st. The shares were sold at an average price of $360.33, for a total transaction of $3,603,300.00. Following the completion of the transaction, the insider owned 72 shares in the company, valued at $25,943.76. This trade represents a 99.29% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. In the last quarter, insiders have sold 40,000 shares of company stock worth $17,495,200. 15.67% of the stock is currently owned by insiders.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently made changes to their positions in DUOL. Invesco Ltd. boosted its position in Duolingo by 24.1% in the first quarter. Invesco Ltd. now owns 1,346,278 shares of the company's stock valued at $418,073,000 after buying an additional 261,212 shares in the last quarter. Price T Rowe Associates Inc. MD raised its stake in shares of Duolingo by 0.8% in the fourth quarter. Price T Rowe Associates Inc. MD now owns 1,339,780 shares of the company's stock valued at $434,398,000 after acquiring an additional 10,638 shares during the last quarter. T. Rowe Price Investment Management Inc. boosted its holdings in shares of Duolingo by 110.5% in the 1st quarter. T. Rowe Price Investment Management Inc. now owns 990,903 shares of the company's stock worth $307,716,000 after acquiring an additional 520,069 shares in the last quarter. Bank of New York Mellon Corp grew its position in Duolingo by 0.4% during the 1st quarter. Bank of New York Mellon Corp now owns 431,464 shares of the company's stock worth $133,987,000 after acquiring an additional 1,506 shares during the last quarter. Finally, Marshall Wace LLP increased its holdings in Duolingo by 36.6% during the 4th quarter. Marshall Wace LLP now owns 388,742 shares of the company's stock valued at $126,042,000 after purchasing an additional 104,114 shares in the last quarter. 91.59% of the stock is owned by institutional investors.

Duolingo Stock Up 33.9%

The firm has a fifty day moving average price of $416.29 and a 200 day moving average price of $391.44. The company has a quick ratio of 2.68, a current ratio of 2.68 and a debt-to-equity ratio of 0.06. The company has a market cap of $20.91 billion, a P/E ratio of 229.34, a PEG ratio of 2.61 and a beta of 0.87.

About Duolingo

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.

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