DUOL Should I Buy
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Duolingo Inc. (DUOL) is not a strong buy at this moment for a beginner investor with a long-term strategy. While the company demonstrates strong financial growth and potential in the EdTech market, technical indicators and recent news suggest caution. The stock's price trend is bearish, and there are concerns about competition and upcoming earnings guidance. It is advisable to wait for more clarity after the earnings report on February 26 or a more favorable technical setup.
The technical indicators for DUOL are bearish. The MACD is below 0 and negatively contracting, the RSI is neutral at 26.856, and the moving averages are bearish (SMA_200 > SMA_20 > SMA_5). The stock is trading below key pivot levels, with support at 109.798 and resistance at 122.132. This suggests a weak price trend in the short term.
Duolingo reported a 36% YoY increase in daily active users in Q3
Revenue increased by 41.08% YoY, and net income surged by 1150.83% YoY in Q3
The company is leveraging AI to enhance user experience and reduce costs, indicating strong growth potential.
Duolingo's expansion into Math, Music, and Chess courses showcases its innovation and diversification.
T-Mobile's launch of a real-time translation feature in over 50 languages has raised competition concerns, leading to a 10% drop in Duolingo's stock.
Analysts have lowered price targets, citing weaker-than-expected user growth and cautious guidance for FY
Technical indicators and trading trends are bearish, with no significant hedge fund or insider activity.
The stock has a 60% chance of declining in the short term based on candlestick pattern analysis.
Duolingo's financial performance in Q3 2025 was strong, with revenue increasing by 41.08% YoY to $271.71M and net income surging by 1150.83% YoY to $292.20M. EPS rose by 1114.29% YoY to 5.95. However, gross margin slightly declined to 72.47%, down 0.60% YoY.
Analysts are mixed on DUOL. Morgan Stanley and Truist maintain a bullish outlook with price targets of $245, citing growth potential and innovation. However, DA Davidson and Wells Fargo are cautious, lowering price targets to $170 and $160, respectively, due to weaker user growth and competition. The consensus reflects cautious optimism but highlights near-term risks.
