Duolingo (NASDAQ:DUOL) Stock Jumps 4.9% - Still a Buy?

Key Points

• Duolingo shares rose 4.9% to about $165, although trading volume was roughly 85% below its average.
• Quarterly revenue of $309 million topped estimates and grew 13.7% year over year, but earnings per share of $0.54 missed the $0.57 consensus. Analysts’ overall rating is Hold, with an average price target of $148.75.
• Potential headwinds include a securities class-action complaint alleging investors were misled about user-growth sustainability and a proposed EU law that could require changes to app features; the allegations are unproven and the legislation is not yet law.

Shares of Duolingo, Inc. (NASDAQ:DUOL - Get Free Report) shot up 4.9% during trading on Friday. The company traded as high as $165.30 and last traded at $165.16. Approximately 268,786 shares were traded during mid-day trading, a decline of 85% from the average session volume of 1,786,045 shares. The stock had previously closed at $157.42.

Key Duolingo News

Here's some of the latest news about DUOL:

• Positive Sentiment: Duolingo’s CEO argued that ChatGPT and live translation are unlikely to replace the app, and said open-weight AI models have reduced the cost of some tasks to less than a cent. The comments may reassure investors about the product’s differentiation and AI costs. Article: Duolingo CEO explains why ChatGPT and live translation won't replace the app Article: Open-weight AI models cut some Duolingo costs to less than a cent, says CEO
• Negative Sentiment: Several law firms publicized a securities class action filed against Duolingo, with a December 7, 2026 deadline to seek lead-plaintiff status. The complaint alleges investors were misled about the sustainability of user growth while the company shifted toward AI-generated lessons; these claims have not been proven. Multiple notices repeat the same lawsuit, rather than representing separate cases. Article: DUOL Investor Alert Article: Kaplan Fox advises Duolingo investors of class action deadline
• Negative Sentiment: A proposed EU Digital Fairness Act could scrutinize app features including Duolingo’s streaks and autoplay. If adopted, new rules could require product changes or add compliance costs, though the proposal is not yet law. Article: EU's proposed Digital Fairness Act takes aim at Duolingo

Analyst Upgrades and Downgrades

DUOL has been the topic of several recent research reports. Needham & Company LLC boosted their target price on Duolingo from $145.00 to $165.00 and gave the stock a "buy" rating in a report on Wednesday, November 4th. Evercore set a $128.00 price target on Duolingo in a report on Wednesday, November 4th. Bank of America reiterated an "underperform" rating and set a $108.00 price objective on shares of Duolingo in a research report on Thursday, November 5th. Compass Point started coverage on Duolingo in a research note on Tuesday, August 18th. They set a "buy" rating on the stock. Finally, Weiss Ratings cut Duolingo from a "hold (c)" rating to a "hold (c-)" rating in a report on Tuesday, November 3rd. Eight investment analysts have rated the stock with a Buy rating, fourteen have assigned a Hold rating and one has issued a Sell rating to the company. According to data from MarketBeat, the stock has a consensus rating of "Hold" and an average target price of $148.75.

Duolingo Trading Up 5.1%

The stock has a market cap of $7.74 billion, a PE ratio of 54.62, a price-to-earnings-growth ratio of 1.29 and a beta of 1.08. The company has a debt-to-equity ratio of 0.06, a quick ratio of 2.75 and a current ratio of 2.75. The company's 50-day moving average price is $146.04 and its 200 day moving average price is $124.35.

Duolingo (NASDAQ:DUOL - Get Free Report) last issued its quarterly earnings data on Tuesday, November 3rd. The company reported $0.54 earnings per share for the quarter, missing the consensus estimate of $0.57 by ($0.03). The business had revenue of $309.01 million during the quarter, compared to analysts' expectations of $303.20 million. Duolingo had a return on equity of 10.35% and a net margin of 12.33%. The company's revenue was up 13.7% on a year-over-year basis. During the same quarter in the previous year, the company posted $5.95 earnings per share. On average, sell-side analysts forecast that Duolingo, Inc. will post 2.72 EPS for the current fiscal year.

Insider Activity at Duolingo

In other news, CEO Luis van Ahn sold 110,046 shares of the company's stock in a transaction that occurred on 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 transaction, the chief executive officer directly owned 110,046 shares in the company, valued at approximately $16,693,978.20. This represents a 50.00% decrease in their position. The sale was disclosed in a legal filing with the SEC, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, General Counsel Stephen C. Chen sold 3,700 shares of the stock in a transaction that occurred on Wednesday, November 4th. The stock was sold at an average price of $175.00, for a total transaction of $647,500.00. Following the transaction, the general counsel directly owned 40,069 shares of the company's stock, valued at $7,012,075. The trade was a 8.45% decrease in their position. 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. Insiders have sold a total of 264,440 shares of company stock valued at $39,697,193 in the last quarter. Corporate insiders own 16.62% of the company's stock.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently modified their holdings of the company. Baird Financial Group Inc. boosted its holdings in Duolingo by 881.9% during the 2nd quarter. Baird Financial Group Inc. now owns 69,331 shares of the company's stock valued at $7,975,000 after acquiring an additional 62,270 shares during the period. Amundi grew its position in Duolingo by 1,351.7% in the 1st quarter. Amundi now owns 449,068 shares of the company's stock valued at $44,265,000 after acquiring an additional 418,134 shares in the last quarter. Public Employees Retirement System of Ohio purchased a new stake in Duolingo during the second quarter worth about $1,262,000. Fifth Third Bancorp increased its stake in Duolingo by 3,588.3% during the first quarter. Fifth Third Bancorp now owns 9,110 shares of the company's stock worth $898,000 after purchasing an additional 8,863 shares during the period. Finally, Reinhart Partners LLC. increased its stake in Duolingo by 43.3% during the third quarter. Reinhart Partners LLC. now owns 29,549 shares of the company's stock worth $4,208,000 after purchasing an additional 8,926 shares during the period. 91.59% of the stock is currently owned by hedge funds and other institutional investors.

Duolingo Company Profile

Duolingo, Inc. is an educational technology company best known for its mobile and web-based language-learning platform. The app offers courses in numerous languages and uses interactive lessons, practice activities and game-like features to help learners build skills. Founded in 2011 by Luis von Ahn and Severin Hacker, the company is headquartered in Pittsburgh, Pennsylvania, and serves learners around the world. Its products also include the Duolingo English Test, an online English-proficiency assessment, and learning apps focused on subjects such as math and music.

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