Duolingo (NASDAQ:DUOL) Stock Crosses Above 50-Day Moving Average After Earnings Miss

Key Points

• Duolingo’s quarterly revenue beat estimates at $309.0 million, up 13.7% year over year, while daily active users climbed 28.5% to 153.1 million. EPS of $0.54 missed the $0.57 consensus.
• Management forecast Q4 bookings growth of 13% and adjusted EBITDA of $84 million, citing lower AI video-call costs as it expands the feature.
• Shares moved above their 50-day moving average of $144.95 and traded as high as $175.56. Analysts’ consensus rating remains “Hold,” with a $141.56 average price target, below the reported latest trade of $161.27.

Shares of Duolingo, Inc. (NASDAQ:DUOL - Get Free Report) crossed above its 50-day moving average during trading on Wednesday following a better than expected earnings announcement. The stock has a 50-day moving average of $144.95 and traded as high as $175.56. Duolingo shares last traded at $161.27, with a volume of 9,555,639 shares changing hands.

The company reported $0.54 earnings per share (EPS) for the quarter, missing analysts' consensus estimates of $0.57 by ($0.03). Duolingo had a return on equity of 10.54% and a net margin of 12.33%. The firm had revenue of $309.01 million during the quarter, compared to analysts' expectations of $303.20 million. During the same quarter in the prior year, the firm earned $5.95 EPS. The firm's revenue was up 13.7% compared to the same quarter last year.

Key Stories Impacting Duolingo

Here are the key news stories impacting Duolingo this week:

• Positive Sentiment: Q3 revenue of $309.0 million topped estimates of $303.2 million, while daily active users grew 28.5% to 153.1 million. Paid subscribers also increased 13.9%, reinforcing the case that stronger engagement can support future growth. Duolingo Q3 2026 results
• Positive Sentiment: Management’s Q4 outlook helped bolster confidence: Duolingo expects bookings to grow 13% and adjusted EBITDA to reach $84 million. The company also cited lower AI video-call costs, which could support broader rollout of the feature. Q4 outlook and Video Call rollout
• Neutral Sentiment: Analysts raised several price targets after the results, but many maintained neutral or equal-weight ratings, with targets below the then-current share price. This suggests the rally may have outpaced some analysts’ near-term valuation expectations. Citigroup price-target update
• Negative Sentiment: Q3 EPS of $0.54 missed the $0.57 consensus estimate. Commentary also noted that a less aggressive monetization approach is weighing on near-term financial performance, even as user growth accelerates. Analysis of mixed Q3 results
• Negative Sentiment: Several law firms publicized a securities class action concerning investors who bought shares between May 2025 and February 2026. The announcements describe allegations, not findings; continued litigation could nevertheless create uncertainty or costs. Class action notice

Analyst Ratings Changes

DUOL has been the subject of a number of recent analyst reports. Bank of America downgraded Duolingo from a "neutral" rating to an "underperform" rating and decreased their price target for the stock from $103.00 to $93.00 in a report on Tuesday, August 4th. Weiss Ratings lowered Duolingo from a "hold (c)" rating to a "hold (c-)" rating in a research report on Tuesday. Susquehanna assumed coverage on Duolingo in a report on Tuesday, August 18th. They issued a "positive" rating for the company. Truist Financial upped their price target on Duolingo from $100.00 to $120.00 and gave the company a "hold" rating in a report on Thursday, August 6th. Finally, JPMorgan Chase & Co. increased their price target on shares of Duolingo from $135.00 to $155.00 and gave the company a "neutral" rating in a research note on Wednesday. Eight equities research analysts have rated the stock with a Buy rating, fifteen have assigned a Hold rating and one has issued a Sell rating to the company's stock. Based on data from MarketBeat, Duolingo currently has a consensus rating of "Hold" and a consensus target price of $141.56.

Insider Activity at Duolingo

In other news, Director William Gordon sold 10,000 shares of Duolingo stock in a transaction dated Tuesday, September 8th. The stock was sold at an average price of $145.67, for a total transaction of $1,456,700.00. Following the sale, the director owned 68,415 shares in the company, valued at approximately $9,966,013.05. The trade was a 12.75% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Luis van Ahn sold 110,046 shares of the business's stock in a transaction dated Wednesday, October 7th. The shares were sold at an average price of $151.70, for a total value of $16,693,978.20. Following the completion of the sale, the chief executive officer directly owned 110,046 shares of the company's stock, valued at $16,693,978.20. The trade was a 50.00% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last three months, insiders have sold 260,740 shares of company stock worth $39,049,693. Insiders own 16.62% of the company's stock.

Institutional Investors Weigh In On Duolingo

Institutional investors have recently added to or reduced their stakes in the business. Bank of America Corp DE raised its holdings in Duolingo by 511.2% during the first quarter. Bank of America Corp DE now owns 1,332,301 shares of the company's stock worth $131,325,000 after purchasing an additional 1,114,315 shares during the last quarter. State of Michigan Retirement System increased its position in shares of Duolingo by 112.9% in the first 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. Renaissance Technologies LLC increased its position in shares of Duolingo by 91.3% in the first quarter. Renaissance Technologies LLC now owns 603,806 shares of the company's stock valued at $59,517,000 after buying an additional 288,252 shares in the last quarter. Amundi boosted its position in shares of Duolingo by 1,351.7% in the 1st quarter. Amundi now owns 449,068 shares of the company's stock worth $44,265,000 after buying an additional 418,134 shares in the last quarter. Finally, Bank of New York Mellon Corp grew its stake in Duolingo by 2.6% in the 1st quarter. Bank of New York Mellon Corp now owns 249,634 shares of the company's stock valued at $24,606,000 after acquiring an additional 6,233 shares during the last quarter. Hedge funds and other institutional investors own 91.59% of the company's stock.

Duolingo Stock Performance

The stock has a market capitalization of $7.55 billion, a price-to-earnings ratio of 53.22, a PEG ratio of 1.05 and a beta of 1.08. The stock's 50 day moving average is $144.95 and its 200 day moving average is $124.13. The company has a current ratio of 2.72, a quick ratio of 2.72 and a debt-to-equity ratio of 0.06.

Duolingo Company Profile

Duolingo, Inc develops technology-based learning products designed to make education accessible and engaging. Its flagship Duolingo mobile and web platform offers gamified courses in languages including Spanish, English, French, German and Japanese, among others. Lessons incorporate interactive exercises, personalized practice and achievement-based features intended to support regular learning.

The company also operates the Duolingo English Test, an online English-proficiency assessment that can be taken remotely and is accepted by educational institutions and other organizations.

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