DA Davidson Initiates Coverage On Duolingo with Buy Rating, Announces Price Target of $250
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 13 2024
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Should l Buy DUOL?
Source: Benzinga
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Analyst Views on DUOL
Wall Street analysts forecast DUOL stock price to rise
17 Analyst Rating
10 Buy
6 Hold
1 Sell
Moderate Buy
Current: 110.100
Low
160.00
Averages
260.36
High
330.00
Current: 110.100
Low
160.00
Averages
260.36
High
330.00
About DUOL
Duolingo, Inc. is a technology company. The Company is engaged in offering a mobile learning platform, as well as a digital English language proficiency assessment exam. It operates a freemium business model, namely, the app and the Website are accessible free of charge, although Duolingo also offers premium services for a subscription fee. Its solutions consist of the Duolingo App, Super Duolingo, Duolingo Max, Duolingo English Test: AI-Driven Language Assessment, Duolingo for Schools, and Duolingo ABC. The Duolingo App offers courses in over 40 different languages, including Spanish, English, French, German, Italian, Portuguese, Japanese and Chinese. Duolingo can also be accessed on desktop computers via a Web browser. Its subscription offering, Super Duolingo, offers learners additional features to enhance their learning experience. The Duolingo English Test is an online, on-demand, high-stakes English proficiency assessment. It also operates an animation and motion design studio.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Duolingo Q1 Earnings Announcement Scheduled
- Earnings Release Date: Duolingo is set to announce its Q1 earnings on May 4th after market close, with a consensus EPS estimate of $1.72, reflecting a significant year-over-year growth of 138.9%, which will be a crucial indicator of the company's profitability.
- Revenue Expectations: The anticipated revenue for Q1 is $288.58 million, representing a 25.1% year-over-year increase, indicating the company's sustained strong performance in user growth and paid subscriptions, which could further boost market confidence.
- Performance Prediction Trends: Over the past year, Duolingo has not met EPS estimates but has achieved a 100% beat on revenue estimates, demonstrating the company's stability in revenue generation and market adaptability.
- Estimate Revision Insights: In the last three months, there have been no upward revisions for EPS estimates, with three downward adjustments, while revenue estimates saw six upward and nine downward revisions, reflecting market divergence and uncertainty regarding the company's future performance.
See More
2026 Market Cap Madness Championship Recap
- Championship Showdown: The 2026 Market Cap Madness Championship featured Emily Flippen facing off against undefeated challenger Loren Horst, showcasing intense competition that captivated many investors.
- Game Mechanics: Contestants were required to provide market cap ranges for randomly mentioned stocks, scoring points by agreeing or disagreeing, highlighting the significance of market caps in investment decisions.
- Stock Performance Analysis: During the game, Texas Instruments' market cap was assessed at $177.50 billion, underscoring its strong position in the semiconductor industry and reflecting investor confidence in its future growth.
- Final Outcome: Emily emerged victorious with an 8-2 score, solidifying her status as the Market Cap Game Show World Champion, emphasizing her keen insights into market dynamics and effective investment strategies.
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Duolingo's Strategic Shift Sparks Market Volatility
- User Growth Strategy: Duolingo's management is shifting resources from monetization to user acquisition, which may slow revenue growth to 15%-18% in 2026; however, they believe this will lay the groundwork for future profitability and enhance market competitiveness.
- Revenue and User Metrics: In 2025, Duolingo's revenue reached $1.04 billion, a 39% increase, with 12.2 million paying users, demonstrating strong platform appeal, although current strategic adjustments have raised investor concerns.
- AI Tool Potential: Duolingo plans to introduce more AI-driven language learning tools aimed at boosting user engagement, with management believing these tools will enhance user experience and further solidify its market position against competitors.
- Valuation Attractiveness: Despite the risk of declining earnings, Duolingo's current P/E ratio of 12.2 is significantly lower than the S&P 500, and its P/S ratio of 4.9 indicates relative undervaluation in the market, potentially attracting long-term investors.
See More
Analysis of Three Undervalued Stocks
- Duolingo User Growth: Duolingo reported 52.3 million monthly active users at the start of the year, a 30% increase year-over-year, yet its stock is trading 81% below its 52-week high, indicating market caution regarding its growth prospects.
- Revenue Growth Deceleration: Despite a 35% revenue increase in Q4, Duolingo anticipates a slowdown in overall revenue growth to 15%-18% for 2026, which could negatively impact its profitability and market confidence.
- MercadoLibre Market Challenges: Trading at $1,841.12 with a P/E ratio of 27, MercadoLibre continues to grow but faces pressure from increased competition and has missed profit targets for three consecutive quarters, dampening market sentiment.
- Carnival Stock Performance: Carnival's stock is priced at $26.77 with a P/E of 12; despite rising fuel costs, it has exceeded earnings expectations for 11 consecutive quarters, indicating strong future growth potential.
See More
Duolingo Stock Plummets 80%, Potential Buying Opportunity Arises
- Stock Price Decline: Duolingo's stock has fallen 80% since its peak in May 2025, trading at just 12.5 times earnings despite a 35% revenue growth rate, indicating that market pessimism may be overstated regarding its future prospects.
- AI Threat and User Growth: While the rise of AI translation tools is perceived as a threat to Duolingo, management's focus on prioritizing user growth over short-term profits may strengthen its market position in the long run.
- Expansion into New Fields: Duolingo is expanding its digital instruction platform into subjects like math, music, and chess, with the recently launched chess course attracting over 7 million daily users, demonstrating the success of its diversification strategy.
- Overreaction in the Market: Despite Duolingo's impressive 40% net profit margin and consistent revenue growth, the market's overreaction to perceived AI threats has led to a significant stock price drop, presenting a potentially undervalued investment opportunity for savvy investors.
See More
Duolingo's Stock Plummets 80% Yet Remains a Value Investment
- Significant Stock Decline: As of April 22, 2026, Duolingo's stock has plummeted 80% from its May 2025 peak of $103.37 to approximately $20.67, reflecting investor panic over perceived AI threats.
- User Growth Focus: Duolingo's management has prioritized user growth over short-term profits, a strategy that may unsettle profit-driven investors but lays a foundation for long-term development.
- AI Technology Utilization: Despite increasing market concerns about AI, Duolingo leverages AI in its super-premium subscription to explain user mistakes and facilitate simple conversations, demonstrating its adaptability and innovative potential in the AI era.
- Strong Financial Performance: Despite stock price pressures, Duolingo achieved a 35% year-over-year revenue growth in Q4 2025 while maintaining a 40% net profit margin, showcasing its competitiveness and long-term investment value.
See More
Duolingo Q1 Earnings Announcement Scheduled
- Earnings Release Date: Duolingo is set to announce its Q1 earnings on May 4th after market close, with a consensus EPS estimate of $1.72, reflecting a significant year-over-year growth of 138.9%, which will be a crucial indicator of the company's profitability.
- Revenue Expectations: The anticipated revenue for Q1 is $288.58 million, representing a 25.1% year-over-year increase, indicating the company's sustained strong performance in user growth and paid subscriptions, which could further boost market confidence.
- Performance Prediction Trends: Over the past year, Duolingo has not met EPS estimates but has achieved a 100% beat on revenue estimates, demonstrating the company's stability in revenue generation and market adaptability.
- Estimate Revision Insights: In the last three months, there have been no upward revisions for EPS estimates, with three downward adjustments, while revenue estimates saw six upward and nine downward revisions, reflecting market divergence and uncertainty regarding the company's future performance.
See More
2026 Market Cap Madness Championship Recap
- Championship Showdown: The 2026 Market Cap Madness Championship featured Emily Flippen facing off against undefeated challenger Loren Horst, showcasing intense competition that captivated many investors.
- Game Mechanics: Contestants were required to provide market cap ranges for randomly mentioned stocks, scoring points by agreeing or disagreeing, highlighting the significance of market caps in investment decisions.
- Stock Performance Analysis: During the game, Texas Instruments' market cap was assessed at $177.50 billion, underscoring its strong position in the semiconductor industry and reflecting investor confidence in its future growth.
- Final Outcome: Emily emerged victorious with an 8-2 score, solidifying her status as the Market Cap Game Show World Champion, emphasizing her keen insights into market dynamics and effective investment strategies.
See More
Duolingo's Strategic Shift Sparks Market Volatility
- User Growth Strategy: Duolingo's management is shifting resources from monetization to user acquisition, which may slow revenue growth to 15%-18% in 2026; however, they believe this will lay the groundwork for future profitability and enhance market competitiveness.
- Revenue and User Metrics: In 2025, Duolingo's revenue reached $1.04 billion, a 39% increase, with 12.2 million paying users, demonstrating strong platform appeal, although current strategic adjustments have raised investor concerns.
- AI Tool Potential: Duolingo plans to introduce more AI-driven language learning tools aimed at boosting user engagement, with management believing these tools will enhance user experience and further solidify its market position against competitors.
- Valuation Attractiveness: Despite the risk of declining earnings, Duolingo's current P/E ratio of 12.2 is significantly lower than the S&P 500, and its P/S ratio of 4.9 indicates relative undervaluation in the market, potentially attracting long-term investors.
See More
Analysis of Three Undervalued Stocks
- Duolingo User Growth: Duolingo reported 52.3 million monthly active users at the start of the year, a 30% increase year-over-year, yet its stock is trading 81% below its 52-week high, indicating market caution regarding its growth prospects.
- Revenue Growth Deceleration: Despite a 35% revenue increase in Q4, Duolingo anticipates a slowdown in overall revenue growth to 15%-18% for 2026, which could negatively impact its profitability and market confidence.
- MercadoLibre Market Challenges: Trading at $1,841.12 with a P/E ratio of 27, MercadoLibre continues to grow but faces pressure from increased competition and has missed profit targets for three consecutive quarters, dampening market sentiment.
- Carnival Stock Performance: Carnival's stock is priced at $26.77 with a P/E of 12; despite rising fuel costs, it has exceeded earnings expectations for 11 consecutive quarters, indicating strong future growth potential.
See More
Duolingo Stock Plummets 80%, Potential Buying Opportunity Arises
- Stock Price Decline: Duolingo's stock has fallen 80% since its peak in May 2025, trading at just 12.5 times earnings despite a 35% revenue growth rate, indicating that market pessimism may be overstated regarding its future prospects.
- AI Threat and User Growth: While the rise of AI translation tools is perceived as a threat to Duolingo, management's focus on prioritizing user growth over short-term profits may strengthen its market position in the long run.
- Expansion into New Fields: Duolingo is expanding its digital instruction platform into subjects like math, music, and chess, with the recently launched chess course attracting over 7 million daily users, demonstrating the success of its diversification strategy.
- Overreaction in the Market: Despite Duolingo's impressive 40% net profit margin and consistent revenue growth, the market's overreaction to perceived AI threats has led to a significant stock price drop, presenting a potentially undervalued investment opportunity for savvy investors.
See More
Duolingo's Stock Plummets 80% Yet Remains a Value Investment
- Significant Stock Decline: As of April 22, 2026, Duolingo's stock has plummeted 80% from its May 2025 peak of $103.37 to approximately $20.67, reflecting investor panic over perceived AI threats.
- User Growth Focus: Duolingo's management has prioritized user growth over short-term profits, a strategy that may unsettle profit-driven investors but lays a foundation for long-term development.
- AI Technology Utilization: Despite increasing market concerns about AI, Duolingo leverages AI in its super-premium subscription to explain user mistakes and facilitate simple conversations, demonstrating its adaptability and innovative potential in the AI era.
- Strong Financial Performance: Despite stock price pressures, Duolingo achieved a 35% year-over-year revenue growth in Q4 2025 while maintaining a 40% net profit margin, showcasing its competitiveness and long-term investment value.
See More
