Zacks Research Downgrades Duolingo (NASDAQ:DUOL) to Strong Sell

Duolingo (NASDAQ:DUOL) was downgraded by investment analysts at Zacks Research from a “hold” rating to a “strong sell” rating in a report issued on Monday,Zacks.com reports.

A number of other brokerages have also weighed in on DUOL. Needham & Company LLC reduced their target price on shares of Duolingo from $300.00 to $145.00 and set a “buy” rating for the company in a research note on Friday, February 27th. Truist Financial lowered shares of Duolingo from a “buy” rating to a “hold” rating and set a $100.00 price target on the stock. in a research report on Friday, February 27th. Citigroup reaffirmed a “neutral” rating and set a $101.00 target price (down from $270.00) on shares of Duolingo in a report on Friday, February 27th. DA Davidson cut their price objective on shares of Duolingo from $170.00 to $85.00 and set a “neutral” rating for the company in a report on Friday, February 27th. Finally, JPMorgan Chase & Co. reissued a “neutral” rating and set a $95.00 target price (down from $200.00) on shares of Duolingo in a report on Friday, February 27th. Five research analysts have rated the stock with a Buy rating, sixteen have issued a Hold rating and two have issued a Sell rating to the stock. According to MarketBeat.com, the stock has an average rating of “Hold” and an average price target of $206.32.

Duolingo Trading Up 0.8%

DUOL stock opened at $101.61 on Monday. The business has a fifty day moving average price of $141.24 and a 200 day moving average price of $219.90. The company has a debt-to-equity ratio of 0.07, a current ratio of 2.61 and a quick ratio of 2.82. Duolingo has a fifty-two week low of $91.99 and a fifty-two week high of $544.93. The stock has a market capitalization of $4.70 billion, a price-to-earnings ratio of 11.93, a P/E/G ratio of 0.66 and a beta of 0.90.

Duolingo (NASDAQ:DUOL) last released its earnings results on Thursday, February 26th. The company reported $0.91 EPS for the quarter, beating the consensus estimate of $0.79 by $0.12. The company had revenue of $282.87 million during the quarter, compared to analysts’ expectations of $275.95 million. Duolingo had a return on equity of 14.88% and a net margin of 39.91%.The firm’s revenue for the quarter was up 35.0% compared to the same quarter last year. Analysts expect that Duolingo will post 2.03 EPS for the current fiscal year.

Insiders Place Their Bets

In other news, insider Natalie Glance sold 3,545 shares of the firm’s stock in a transaction that occurred on Wednesday, February 18th. The shares were sold at an average price of $113.51, for a total transaction of $402,392.95. Following the completion of the sale, the insider owned 115,380 shares of the company’s stock, valued at $13,096,783.80. This trade represents a 2.98% decrease in their position. The sale was disclosed in a filing with the SEC, which is available through this link. Also, CFO Matthew Skaruppa sold 3,986 shares of Duolingo stock in a transaction on Wednesday, February 18th. The shares were sold at an average price of $113.52, for a total transaction of $452,490.72. Following the completion of the sale, the chief financial officer directly owned 31,631 shares of the company’s stock, valued at approximately $3,590,751.12. This trade represents a 11.19% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Over the last ninety days, insiders sold 14,939 shares of company stock worth $1,676,291. Company insiders own 18.30% of the company’s stock.

Institutional Inflows and Outflows

A number of large investors have recently made changes to their positions in the company. NewEdge Advisors LLC boosted its position in Duolingo by 1,868.2% in the first quarter. NewEdge Advisors LLC now owns 433 shares of the company’s stock worth $134,000 after purchasing an additional 411 shares during the last quarter. Goldman Sachs Group Inc. grew its stake in Duolingo by 123.9% in the 1st quarter. Goldman Sachs Group Inc. now owns 87,556 shares of the company’s stock valued at $27,190,000 after buying an additional 48,451 shares in the last quarter. Focus Partners Wealth grew its position in shares of Duolingo by 28.3% in the first quarter. Focus Partners Wealth now owns 2,021 shares of the company’s stock valued at $628,000 after purchasing an additional 446 shares in the last quarter. Hantz Financial Services Inc. increased its position in shares of Duolingo by 1,630.8% during the second quarter. Hantz Financial Services Inc. now owns 225 shares of the company’s stock valued at $92,000 after buying an additional 212 shares during the period. Finally, Assetmark Inc. increased its holdings in Duolingo by 7.0% during the 2nd quarter. Assetmark Inc. now owns 2,884 shares of the company’s stock worth $1,182,000 after acquiring an additional 189 shares during the period. 91.59% of the stock is owned by institutional investors.

Key Duolingo News

Here are the key news stories impacting Duolingo this week:

• Positive Sentiment: Company-backed buyback: Duolingo signaled support for user-growth and AI initiatives with a US$400M buyback plan — a clear cash-return / confidence signal that can underpin the share price. Duolingo Backs User Growth And AI With US$400m Buyback Plan
• Neutral Sentiment: Short-interest reports look anomalous/zero in the March filings (reported 0 shares / 0.0 days), so they offer no clear signal to traders at present. (Likely data/reporting quirk.)
• Negative Sentiment: Multiple law firms (Pomerantz; Faruqi & Faruqi) have announced investigations/claims on behalf of Duolingo investors — increased litigation risk that can pressure the stock and investor sentiment. INVESTOR ALERT: Pomerantz Law Firm Investigates Claims On Behalf of Investors of Duolingo, Inc. – DUOL DUOL SHAREHOLDER REMINDER: Faruqi & Faruqi, LLP Investigates Claims on Behalf of Investors of Duolingo
• Negative Sentiment: Analysts are cutting price targets and maintaining cautious/neutral ratings: Goldman Sachs cut its PT to $105 (neutral), Barclays to $110 (equal weight), DA Davidson to $85, Needham lowered its PT and several firms reiterated hold/neutral — downward revisions increase selling pressure and limit upside. Goldman Sachs Lowers Price Target to $105
• Negative Sentiment: Critical media and research pieces highlight decelerating growth, margin compression and strategic uncertainty (management shifting to user growth vs. monetization). Such narratives can weigh on valuation after the stock’s large multi-year decline. Duolingo: The 80% Drop Doesn’t Make It Cheap Duolingo: Heading To The Unknown – Avoid Duolingo Stock Is Falling Off a Cliff, Continuing a Dramatic Collapse
• Negative Sentiment: Competitive risk: reports that Google launched a new language-learning tool raise product/market-share concerns in the long run. Goodbye Duolingo: Google has just launched a new language learning tool

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.