Duolingo (NASDAQ:DUOL) Shares Up 6.4% - What's Next?

Key Points

• Duolingo shares rose 6.4% in mid-day trading, with the stock reaching as high as $126.40 after closing at $117.86 the prior session.
• Recent analyst actions have been mixed, but the overall stance remains cautious: several firms cut targets or downgraded the stock, while Duolingo’s consensus rating is Hold with an average price target of $197.61.
• The company’s latest earnings were solid, as Duolingo beat EPS and revenue estimates and posted 26.5% year-over-year revenue growth, while institutional ownership remains high at 91.59% despite some insider selling.

Duolingo, Inc. (NASDAQ:DUOL - Get Free Report)'s stock price shot up 6.4% during mid-day trading on Wednesday . The stock traded as high as $126.40 and last traded at $125.4520. 642,627 shares were traded during mid-day trading, a decline of 72% from the average session volume of 2,293,141 shares. The stock had previously closed at $117.86.

Analyst Upgrades and Downgrades

Several brokerages have issued reports on DUOL. Truist Financial lowered Duolingo from a "buy" rating to a "hold" rating and set a $100.00 price target on the stock. in a report on Friday, February 27th. Barclays cut their price target on Duolingo from $230.00 to $110.00 and set an "equal weight" rating on the stock in a report on Monday, March 2nd. DA Davidson increased their price target on Duolingo from $90.00 to $120.00 and gave the stock a "neutral" rating in a report on Tuesday. Zacks Research upgraded Duolingo from a "strong sell" rating to a "hold" rating in a report on Tuesday, April 28th. Finally, JPMorgan Chase & Co. increased their price target on Duolingo from $92.00 to $94.00 and gave the stock a "neutral" rating in a report on Tuesday, May 5th. Three investment analysts have rated the stock with a Buy rating, seventeen have assigned a Hold rating and two have issued a Sell rating to the company's stock. According to MarketBeat, Duolingo currently has an average rating of "Hold" and a consensus price target of $197.61.

Duolingo Stock Up 5.5%

The stock has a fifty day moving average of $104.50 and a 200 day moving average of $130.77. The firm has a market capitalization of $5.79 billion, a P/E ratio of 14.27, a price-to-earnings-growth ratio of 0.89 and a beta of 0.89. The company has a debt-to-equity ratio of 0.07, a current ratio of 2.62 and a quick ratio of 2.62.

Duolingo (NASDAQ:DUOL - Get Free Report) last issued its quarterly earnings results on Monday, May 4th. The company reported $0.89 EPS for the quarter, topping analysts' consensus estimates of $0.79 by $0.10. The business had revenue of $291.97 million for the quarter, compared to analyst estimates of $288.60 million. Duolingo had a return on equity of 14.07% and a net margin of 38.44%.Duolingo's quarterly revenue was up 26.5% compared to the same quarter last year. During the same period last year, the company posted $0.72 earnings per share. On average, research analysts anticipate that Duolingo, Inc. will post 2.84 EPS for the current fiscal year.

Insider Buying and Selling

In related news, General Counsel Stephen C. Chen sold 1,977 shares of Duolingo stock in a transaction on Monday, May 18th. The stock was sold at an average price of $113.61, for a total transaction of $224,606.97. Following the sale, the general counsel directly owned 52,807 shares in the company, valued at approximately $5,999,403.27. This trade represents a 3.61% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which can be accessed through 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 Duolingo stock in a transaction on Friday, May 15th. The stock was sold at an average price of $112.16, for a total value of $159,267.20. Following the sale, the insider owned 170,745 shares in the company, valued at $19,150,759.20. This trade represents a 0.82% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Over the last three months, insiders have sold 9,506 shares of company stock worth $1,073,864. 16.62% of the stock is owned by company insiders.

Institutional Trading of Duolingo

Several hedge funds have recently made changes to their positions in the company. Baillie Gifford & Co. raised its stake in shares of Duolingo by 71.9% in the fourth quarter. Baillie Gifford & Co. now owns 4,861,445 shares of the company's stock valued at $853,184,000 after buying an additional 2,033,611 shares during the period. Capital World Investors lifted its stake in shares of Duolingo by 0.5% during the 4th quarter. Capital World Investors now owns 2,241,378 shares of the company's stock valued at $393,362,000 after buying an additional 11,140 shares in the last quarter. Bank of America Corp DE lifted its stake in shares of Duolingo by 511.2% during the 1st quarter. Bank of America Corp DE now owns 1,332,301 shares of the company's stock valued at $131,325,000 after buying an additional 1,114,315 shares in the last quarter. State of Michigan Retirement System lifted its stake in shares of Duolingo by 112.9% during the 1st quarter. State of Michigan Retirement System now owns 1,193,307 shares of the company's stock valued at $117,624,000 after buying an additional 632,807 shares in the last quarter. Finally, State Street Corp raised its stake in shares of Duolingo by 0.5% during the 2nd quarter. State Street Corp now owns 1,164,387 shares of the company's stock valued at $477,422,000 after purchasing an additional 6,109 shares during the period. 91.59% of the stock is currently owned by institutional investors.

Duolingo Company Profile

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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