Assessing Duolingo: Insights From 11 Financial Analysts

Throughout the last three months, 11 analysts have evaluated Duolingo DUOL, offering a diverse set of opinions from bullish to bearish.

The following table encapsulates their recent ratings, offering a glimpse into the evolving sentiments over the past 30 days and comparing them to the preceding months.

Analysts have recently evaluated Duolingo and provided 12-month price targets. The average target is $382.73, accompanied by a high estimate of $410.00 and a low estimate of $330.00. This current average has increased by 7.84% from the previous average price target of $354.90.

Understanding Analyst Ratings: A Comprehensive Breakdown

The standing of Duolingo among financial experts becomes clear with a thorough analysis of recent analyst actions. The summary below outlines key analysts, their recent evaluations, and adjustments to ratings and price targets.

Key Insights:

• Action Taken: Responding to changing market dynamics and company performance, analysts update their recommendations. Whether they 'Maintain', 'Raise', or 'Lower' their stance, it signifies their response to recent developments related to Duolingo. This offers insight into analysts' perspectives on the current state of the company.
• Rating: Delving into assessments, analysts assign qualitative values, from 'Outperform' to 'Underperform'. These ratings communicate expectations for the relative performance of Duolingo compared to the broader market.
• Price Targets: Analysts explore the dynamics of price targets, providing estimates for the future value of Duolingo's stock. This examination reveals shifts in analysts' expectations over time.

Considering these analyst evaluations in conjunction with other financial indicators can offer a comprehensive understanding of Duolingo's market position. Stay informed and make well-informed decisions with our Ratings Table.

Stay up to date on Duolingo analyst ratings.

Delving into Duolingo's Background

Duolingo Inc is a technology company that develops a mobile learning platform to learn languages and is the top-grossing app in the Education category on both Google Play and the Apple App Store. Its products are powered by sophisticated data analytics and artificial intelligence and delivered with class art, animation, and design to make it easier for learners to stay motivated master new material, and achieve their learning goals. Its solutions include the Duolingo Language Learning App, Super Duolingo, Duolingo English Test: AI-Driven Language Assessment, Duolingo For Schools, Duolingo ABC, and Duolingo Math. It has four predominant sources of revenue; time-based subscriptions, in-app advertising placement by third parties, and the Duolingo English Test, and In-App Purchases.

Breaking Down Duolingo's Financial Performance

Market Capitalization: Positioned above industry average, the company's market capitalization underscores its superiority in size, indicative of a strong market presence.

Revenue Growth: Duolingo's remarkable performance in 3 months is evident. As of 31 December, 2024, the company achieved an impressive revenue growth rate of 38.79%. This signifies a substantial increase in the company's top-line earnings. In comparison to its industry peers, the company stands out with a growth rate higher than the average among peers in the Consumer Discretionary sector.

Net Margin: Duolingo's net margin is below industry averages, indicating potential challenges in maintaining strong profitability. With a net margin of 6.64%, the company may face hurdles in effective cost management.

Return on Equity (ROE): Duolingo's ROE is below industry averages, indicating potential challenges in efficiently utilizing equity capital. With an ROE of 1.69%, the company may face hurdles in achieving optimal financial returns.

Return on Assets (ROA): Duolingo's ROA is below industry standards, pointing towards difficulties in efficiently utilizing assets. With an ROA of 1.1%, the company may encounter challenges in delivering satisfactory returns from its assets.

Debt Management: Duolingo's debt-to-equity ratio is below the industry average. With a ratio of 0.07, the company relies less on debt financing, maintaining a healthier balance between debt and equity, which can be viewed positively by investors.

How Are Analyst Ratings Determined?

Analysts work in banking and financial systems and typically specialize in reporting for stocks or defined sectors. Analysts may attend company conference calls and meetings, research company financial statements, and communicate with insiders to publish "analyst ratings" for stocks. Analysts typically rate each stock once per quarter.

Some analysts publish their predictions for metrics such as growth estimates, earnings, and revenue to provide additional guidance with their ratings. When using analyst ratings, it is important to keep in mind that stock and sector analysts are also human and are only offering their opinions to investors.

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This article was generated by Benzinga's automated content engine and reviewed by an editor.