Arthedge Capital Management LLC Purchases 30,500 Shares of Duolingo, Inc. $DUOL

Key Points

• Arthedge Capital Management boosted its Duolingo position by 68.8% in the fourth quarter, buying 30,500 additional shares and bringing its total to 74,800 shares worth about $13.1 million.
• Institutional interest in Duolingo remains high, with hedge funds and other investors owning 91.59% of the company’s stock. Several firms, including Baillie Gifford and Norges Bank, also recently increased or initiated positions.
• Analysts are cautious on the stock: Duolingo has a consensus Hold rating, and several firms recently lowered price targets or downgraded shares, even as the company reported better-than-expected quarterly EPS and revenue growth of 26.5% year over year.

Arthedge Capital Management LLC increased its position in Duolingo, Inc. (NASDAQ:DUOL - Free Report) by 68.8% during the fourth quarter, according to its most recent Form 13F filing with the SEC. The fund owned 74,800 shares of the company's stock after buying an additional 30,500 shares during the period. Duolingo accounts for 8.6% of Arthedge Capital Management LLC's portfolio, making the stock its 4th largest holding. Arthedge Capital Management LLC owned 0.16% of Duolingo worth $13,127,000 at the end of the most recent quarter.

A number of other hedge funds have also recently added to or reduced their stakes in DUOL. Baillie Gifford & Co. increased its holdings in Duolingo by 71.9% in the fourth quarter. Baillie Gifford & Co. now owns 4,861,445 shares of the company's stock worth $853,184,000 after buying an additional 2,033,611 shares during the last quarter. State of Michigan Retirement System increased its holdings in Duolingo by 5,800.0% in the fourth quarter. State of Michigan Retirement System now owns 560,500 shares of the company's stock worth $98,368,000 after buying an additional 551,000 shares during the last quarter. FIL Ltd increased its holdings in Duolingo by 1,715,575.9% in the fourth quarter. FIL Ltd now owns 497,546 shares of the company's stock worth $87,319,000 after buying an additional 497,517 shares during the last quarter. Norges Bank acquired a new position in Duolingo in the fourth quarter worth approximately $86,159,000. Finally, Balyasny Asset Management L.P. increased its holdings in Duolingo by 22,970.4% in the third quarter. Balyasny Asset Management L.P. now owns 415,268 shares of the company's stock worth $133,650,000 after buying an additional 413,468 shares during the last quarter. Institutional investors and hedge funds own 91.59% of the company's stock.

Analysts Set New Price Targets

A number of research firms recently commented on DUOL. Truist Financial downgraded Duolingo from a "buy" rating to a "hold" rating and set a $100.00 price objective on the stock. in a report on Friday, February 27th. Morgan Stanley lowered their price target on Duolingo from $100.00 to $95.00 and set an "equal weight" rating on the stock in a report on Tuesday, May 5th. Weiss Ratings downgraded Duolingo from a "hold (c-)" rating to a "sell (d+)" rating in a report on Wednesday, April 22nd. Citigroup reiterated a "neutral" rating and set a $101.00 price target (down from $270.00) on shares of Duolingo in a report on Friday, February 27th. Finally, Evercore set a $97.00 price target on Duolingo in a report on Tuesday, May 5th. Two equities research analysts have rated the stock with a Buy rating, eighteen have issued a Hold rating and two have given 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.

Insider Buying and Selling

In related news, insider Robert Meese sold 1,420 shares of the firm's 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 completion of the transaction, the insider directly owned 170,745 shares of the company's stock, valued at $19,150,759.20. This trade represents a 0.82% decrease in their ownership of the stock. The sale was disclosed in a document filed 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 firm's stock in a transaction on Monday, May 18th. The stock was sold at an average price of $113.59, for a total value of $381,662.40. Following the completion of the transaction, the insider directly owned 173,401 shares of the company's stock, valued at approximately $19,696,619.59. This trade represents a 1.90% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. 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. Insiders sold a total of 9,506 shares of company stock valued at $1,073,864 over the last ninety days. 16.62% of the stock is owned by company insiders.

Duolingo Trading Down 3.7%

Shares of Duolingo stock opened at $123.39 on Thursday. The company's fifty day simple moving average is $107.81 and its 200-day simple moving average is $128.52. The company has a market cap of $5.75 billion, a price-to-earnings ratio of 14.20, a PEG ratio of 0.97 and a beta of 0.89. The company has a current ratio of 2.62, a quick ratio of 2.62 and a debt-to-equity ratio of 0.07. Duolingo, Inc. has a 1 year low of $87.89 and a 1 year high of $483.03.

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

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.

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