Duolingo (NASDAQ:DUOL) Lowered to “Strong Sell” Rating by Zacks Research

Duolingo (NASDAQ:DUOL) was downgraded by equities researchers at Zacks Research from a “hold” rating to a “strong sell” rating in a research report issued to clients and investors on Monday,Zacks.com reports.

A number of other research firms have also recently weighed in on DUOL. Jefferies Financial Group upped their price target on shares of Duolingo from $210.00 to $220.00 and gave the stock a “hold” rating in a research note on Thursday, December 11th. Evercore reissued a “hold” rating and issued a $114.00 price target on shares of Duolingo in a report on Friday, February 27th. Needham & Company LLC reduced their price objective on shares of Duolingo from $300.00 to $145.00 and set a “buy” rating on the stock in a research note on Friday, February 27th. JPMorgan Chase & Co. reissued a “neutral” rating and issued a $95.00 price target (down from $200.00) on shares of Duolingo in a research note on Friday, February 27th. Finally, Weiss Ratings reissued a “hold (c)” rating on shares of Duolingo in a research note on Monday, December 29th. Five research analysts have rated the stock with a Buy rating, sixteen have assigned a Hold rating and two have issued a Sell rating to the company. Based on data from MarketBeat.com, Duolingo has an average rating of “Hold” and an average price target of $206.32.

Duolingo Price Performance

DUOL stock opened at $101.61 on Monday. The business has a 50 day moving average price of $141.24 and a 200 day moving average price of $219.90. Duolingo has a fifty-two week low of $91.99 and a fifty-two week high of $544.93. The company has a quick ratio of 2.82, a current ratio of 2.61 and a debt-to-equity ratio of 0.07. The stock has a market cap of $4.70 billion, a price-to-earnings ratio of 11.93, a PEG ratio of 0.66 and a beta of 0.90.

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

Insider Buying and Selling at Duolingo

In other Duolingo news, General Counsel Stephen C. Chen sold 1,901 shares of Duolingo stock in a transaction on Wednesday, February 18th. The stock was sold at an average price of $113.26, for a total transaction of $215,307.26. Following the sale, the general counsel owned 30,545 shares of the company’s stock, valued at $3,459,526.70. The trade was a 5.86% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, CFO Matthew Skaruppa sold 3,986 shares of the business’s stock in a transaction dated Wednesday, February 18th. The stock was sold at an average price of $113.52, for a total transaction of $452,490.72. Following the sale, the chief financial officer owned 31,631 shares in the company, valued at $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 90 days, insiders sold 14,939 shares of company stock valued at $1,676,291. Corporate insiders own 18.30% of the company’s stock.

Institutional Trading of Duolingo

A number of large investors have recently added to or reduced their stakes in the business. Baillie Gifford & Co. grew its position in Duolingo by 71.9% during the 4th quarter. Baillie Gifford & Co. now owns 4,861,445 shares of the company’s stock worth $853,184,000 after purchasing an additional 2,033,611 shares in the last quarter. Vanguard Group Inc. lifted its position in shares of Duolingo by 3.3% in the second quarter. Vanguard Group Inc. now owns 3,647,951 shares of the company’s stock worth $1,495,733,000 after buying an additional 116,135 shares during the last quarter. Capital World Investors lifted its holdings in Duolingo by 0.5% in the 4th quarter. Capital World Investors now owns 2,241,378 shares of the company’s stock worth $393,362,000 after purchasing an additional 11,140 shares during the last quarter. Dragoneer Investment Group LLC lifted its stake in shares of Duolingo by 324.4% in the third quarter. Dragoneer Investment Group LLC now owns 1,580,787 shares of the company’s stock worth $508,760,000 after buying an additional 1,208,346 shares during the last quarter. Finally, State Street Corp boosted its holdings in Duolingo by 0.5% during the second quarter. State Street Corp now owns 1,164,387 shares of the company’s stock valued at $477,422,000 after acquiring an additional 6,109 shares during the period. 91.59% of the stock is currently owned by institutional investors.

Duolingo News Summary

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

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.