Duolingo (NASDAQ:DUOL) Shares Up 4.6% - Time to Buy?

Key Points

• Duolingo shares rose 4.6% to about $140.49 in midday trading, though volume was 96% below the average session level.
• Analyst sentiment remains cautious: the stock has a consensus “Hold” rating and a $124.38 price target, below its recent trading price.
• The company exceeded quarterly expectations with EPS of $0.66 versus $0.60 expected and revenue of $298.45 million, up 18.3% year over year; however, insiders sold roughly $21 million of shares over the past three months.

Duolingo, Inc. (NASDAQ:DUOL - Get Free Report) shares were up 4.6% during mid-day trading on Tuesday. The stock traded as high as $137.23 and last traded at $140.4880. Approximately 72,763 shares changed hands during mid-day trading, a decline of 96% from the average session volume of 1,871,453 shares. The stock had previously closed at $134.30.

Analysts Set New Price Targets

Several research analysts have commented on the company. JPMorgan Chase & Co. boosted their target price on Duolingo from $125.00 to $135.00 and gave the stock a "neutral" rating in a research note on Thursday, August 27th. Craig Hallum downgraded shares of Duolingo to a "hold" rating in a research note on Tuesday, August 18th. Barclays lifted their price target on shares of Duolingo from $110.00 to $115.00 and gave the company an "equal weight" rating in a report on Thursday, August 6th. Weiss Ratings reiterated a "hold (c-)" rating on shares of Duolingo in a research report on Monday, September 14th. Finally, Evercore set a $105.00 price objective on shares of Duolingo in a research note on Thursday, August 6th. One investment analyst has rated the stock with a Strong Buy rating, eight have given a Buy rating, fourteen have given a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat, Duolingo has a consensus rating of "Hold" and a consensus price target of $124.38.

Duolingo Stock Performance

The firm has a market capitalization of $6.56 billion, a P/E ratio of 16.63, a P/E/G ratio of 1.18 and a beta of 0.89. The stock has a fifty day simple moving average of $141.33 and a two-hundred day simple moving average of $121.44. The company has a debt-to-equity ratio of 0.06, a current ratio of 2.72 and a quick ratio of 2.72.

Duolingo (NASDAQ:DUOL - Get Free Report) last issued its earnings results on Wednesday, August 5th. The company reported $0.66 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.60 by $0.06. Duolingo had a net margin of 35.88% and a return on equity of 12.10%. The business had revenue of $298.45 million for the quarter, compared to analyst estimates of $295.58 million. During the same period in the prior year, the firm earned $0.91 earnings per share. Duolingo's revenue was up 18.3% on a year-over-year basis. On average, research analysts predict that Duolingo, Inc. will post 2.62 EPS for the current year.

Insider Activity at Duolingo

In other Duolingo news, Director William Gordon sold 10,000 shares of Duolingo stock in a transaction that occurred on Tuesday, September 8th. The shares were sold at an average price of $145.67, for a total transaction of $1,456,700.00. Following the transaction, the director owned 68,415 shares of the company's stock, valued at $9,966,013.05. This trade represents a 12.75% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Natalie Glance sold 2,751 shares of Duolingo stock in a transaction on Monday, August 17th. The stock was sold at an average price of $129.13, for a total value of $355,236.63. Following the sale, the insider owned 170,650 shares in the company, valued at $22,036,034.50. This trade represents a 1.59% 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. Insiders sold 140,694 shares of company stock valued at $20,991,914 over the last three months. Insiders own 16.62% of the company's stock.

Institutional Trading of Duolingo

Institutional investors have recently modified their holdings of the business. Banque Cantonale Vaudoise boosted its holdings in Duolingo by 51.1% in the 1st quarter. Banque Cantonale Vaudoise now owns 340 shares of the company's stock valued at $34,000 after purchasing an additional 115 shares in the last quarter. Generali Investments Towarzystwo Funduszy Inwestycyjnych increased its holdings in Duolingo by 42.9% during the 1st quarter. Generali Investments Towarzystwo Funduszy Inwestycyjnych now owns 500 shares of the company's stock valued at $49,000 after acquiring an additional 150 shares in the last quarter. Root Financial Partners LLC lifted its stake in Duolingo by 194.1% in the 1st quarter. Root Financial Partners LLC now owns 250 shares of the company's stock valued at $25,000 after buying an additional 165 shares in the last quarter. Rathbones Group PLC boosted its stake in shares of Duolingo by 2.9% during the first quarter. Rathbones Group PLC now owns 7,460 shares of the company's stock valued at $735,000 after acquiring an additional 211 shares during the last quarter. Finally, Oregon Public Employees Retirement Fund lifted its stake in shares of Duolingo by 3.1% during the first quarter. Oregon Public Employees Retirement Fund now owns 8,224 shares of the company's stock valued at $811,000 after buying an additional 244 shares during the period. 91.59% of the stock is currently owned by hedge funds and other institutional investors.

Duolingo Company Profile

Duolingo, Inc develops digital learning products designed to make education accessible through mobile devices and the web. Its primary product is the Duolingo language-learning platform, which offers courses in numerous languages through interactive, game-like lessons, practice exercises and personalized learning features.

The company also provides the Duolingo English Test, an online English-proficiency assessment used by educational institutions and other organizations. In addition, Duolingo has expanded beyond language learning with products such as Duolingo Math and Duolingo Music, while offering premium subscription features through plans including Super Duolingo and Duolingo Max.

Duolingo serves users internationally, with its applications and online services available across a broad range of geographies.

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