Duolingo (NASDAQ:DUOL) Trading Down 4.6% on Insider Selling

Key Points

• Duolingo shares fell 4.6% in midday trading after insider selling, with the stock trading below its prior close and volume running far under normal levels.
• Insiders Robert Meese and Natalie Glance sold shares in recent transactions, and the company said the sales were largely tied to tax withholding obligations from vested equity awards; some were also made under a Rule 10b5-1 plan.
• Despite the pullback, Duolingo’s latest earnings were solid, with EPS of $0.89 beating estimates and revenue rising 26.5% year over year, though analysts broadly remain cautious with a Hold consensus and lower target prices.

Shares of Duolingo, Inc. (NASDAQ:DUOL - Get Free Report) were down 4.6% during mid-day trading on Wednesday following insider selling activity. The stock traded as low as $106.80 and last traded at $108.8270. Approximately 377,179 shares were traded during mid-day trading, a decline of 84% from the average daily volume of 2,427,284 shares. The stock had previously closed at $114.10.

Specifically, insider Robert Meese sold 1,420 shares of the business'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 directly owned 170,745 shares in the company, valued at $19,150,759.20. The trade was a 0.82% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, insider Natalie Glance sold 3,360 shares of the business's stock in a transaction that occurred on Monday, May 18th. The stock was sold at an average price of $113.59, for a total transaction of $381,662.40. Following the sale, the insider owned 173,401 shares of the company's stock, valued at approximately $19,696,619.59. This represents a 1.90% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. 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. In other Duolingo news, insider Natalie Glance sold 1,929 shares of the business'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 $216,356.64. Following the completion of the sale, the insider directly owned 176,761 shares in the company, valued at $19,825,513.76. The trade was a 1.08% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. 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.

Analyst Ratings Changes

A number of research analysts have recently commented on DUOL shares. Morgan Stanley reduced their target price on shares of Duolingo from $100.00 to $95.00 and set an "equal weight" rating on the stock in a research report on Tuesday, May 5th. Scotiabank reissued a "sector perform" rating and set a $100.00 target price (down from $300.00) on shares of Duolingo in a research report on Friday, February 27th. Evercore set a $97.00 target price on shares of Duolingo in a research report on Tuesday, May 5th. Truist Financial cut shares of Duolingo from a "buy" rating to a "hold" rating and set a $100.00 target price on the stock. in a research report on Friday, February 27th. Finally, Zacks Research raised shares of Duolingo from a "strong sell" rating to a "hold" rating in a research report on Tuesday, April 28th. Three investment analysts have rated the stock with a Buy rating, seventeen have assigned a Hold rating and two have given a Sell rating to the stock. According to data from MarketBeat, the company presently has a consensus rating of "Hold" and an average target price of $195.94.

Duolingo Stock Down 4.7%

The firm's 50-day moving average price is $101.15 and its 200 day moving average price is $141.61. The firm has a market cap of $5.07 billion, a P/E ratio of 12.55, a price-to-earnings-growth ratio of 0.86 and a beta of 0.90. The company has a quick ratio of 2.62, a current ratio of 2.62 and a debt-to-equity ratio of 0.07.

Duolingo (NASDAQ:DUOL - Get Free Report) last released its quarterly earnings results on Monday, May 4th. The company reported $0.89 EPS for the quarter, topping the consensus estimate of $0.79 by $0.10. The business had revenue of $291.97 million during the quarter, compared to analyst estimates of $288.60 million. Duolingo had a net margin of 38.44% and a return on equity of 14.07%. The company's quarterly revenue was up 26.5% on a year-over-year basis. During the same quarter in the prior year, the firm earned $0.72 earnings per share. As a group, research analysts expect that Duolingo, Inc. will post 2.84 earnings per share for the current year.

Institutional Trading of Duolingo

A number of hedge funds have recently made changes to their positions in the stock. Citigroup Inc. lifted its position in Duolingo by 31.8% in the third quarter. Citigroup Inc. now owns 259,666 shares of the company's stock worth $83,571,000 after purchasing an additional 62,614 shares during the period. Intech Investment Management LLC raised its holdings in shares of Duolingo by 967.3% in the third quarter. Intech Investment Management LLC now owns 48,926 shares of the company's stock valued at $15,746,000 after buying an additional 44,342 shares during the last quarter. Baillie Gifford & Co. raised its holdings 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 last quarter. Mitchell Capital Management Co. bought a new position in shares of Duolingo in the third quarter valued at about $4,589,000. Finally, GF Fund Management CO. LTD. bought a new position in shares of Duolingo in the third quarter valued at about $6,366,000. 91.59% of the stock is owned by hedge funds and other 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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