Duolingo, Inc.

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Somewhat Bearish -25

Duolingo, Inc. (DUOL) Is a Trending Stock: Facts to Know Before Betting on It

AI-generated analysis

📈 Duolingo shares have returned +5.7% over the past month, slightly outperforming the S&P 500's +5.4% gain.

🏢 The company belongs to the Zacks Technology Services industry, which has gained 11.3% in the same period.

📉 Current quarter earnings are expected at $0.62 per share, representing a -31.9% decline from the year-ago quarter.

📉 The consensus earnings estimate for the current fiscal year is $2.84, indicating a -66.9% drop from the prior year.

📈 Next fiscal year earnings are projected at $3.13 per share, showing a +10.5% increase from last year's expectations.

💰 Consensus sales for the current quarter are estimated at $295.63 million, pointing to a +17.2% year-over-year growth.

📊 Reported revenues of $291.97 million in the last quarter beat the consensus estimate by +1.19%.

🎯 Duolingo beat consensus EPS estimates in each of the trailing four quarters with an average surprise of +12.66%.

🏆 The company has topped revenue estimates for every quarter over the trailing four-quarter period.

📉 Zacks Rank #4 (Sell) is assigned to Duolingo based on recent changes in consensus earnings estimates and other factors.

📉 The Zacks Consensus Estimate for current quarter earnings has changed -4.3% over the last 30 days.

💰 Current fiscal year sales estimate of $1.21 billion indicates a +16.3% change from the prior year.

📈 Next fiscal year sales estimate of $1.36 billion indicates a +13% change from the prior year.

🏅 Duolingo receives a Zacks Value Style Score of B, indicating it is trading at a discount to its peers.

⚠️ The Zacks Rank #4 suggests that Duolingo may underperform the broader market in the near term.

Bullish Signals
  • Duolingo shares returned +5.7% over the past month, outperforming the Zacks S&P 500 composite's +5.4% change.
  • The company beat consensus EPS estimates in each of the trailing four quarters with a reported EPS surprise of +12.66%.
  • Duolingo topped consensus revenue estimates each time over the trailing four quarter period, reporting revenues of $291.97 million versus an estimate of $288.54 million.
  • The company's reported revenues for the last quarter represented a year-over-year change of +26.5%, exceeding the consensus sales estimate of $295.63 million which points to a projected growth of +17.2%.
  • Duolingo is graded B on the Zacks Value Style Score, indicating that it is trading at a discount to its peers.
  • The consensus earnings estimate for the next fiscal year of $3.13 indicates a change of +10.5% from what Duolingo is expected to report a year ago.
Risk Factors
  • Analysts project Duolingo to report earnings of $0.62 per share for the current quarter, representing a 31.9% decline from the year-ago quarter.
  • The consensus earnings estimate has dropped 4.3% over the last 30 days, indicating downward revision in analyst expectations.
  • For the full fiscal year, the consensus earnings estimate stands at $2.84, down 66.9% from the prior year.
  • Based on the size of the recent negative change in consensus earnings estimates and other factors, the proprietary Zacks Rank tool has assigned the stock a #4 (Sell) rating.
  • This #4 (Sell) rating indicates that Duolingo may underperform the broader market in the near term despite its strong historical track record.
Full Analysis
Duolingo, Inc. (DUOL) shares have returned 5.7% over the past month, slightly outperforming the Zacks S&P 500 composite's 5.4% gain but lagging the Technology Services industry's 11.3% rise. The article highlights that while media buzz often drives short-term stock trends, fundamental factors like earnings estimate revisions are more critical for long-term value. Analysts project Duolingo to report earnings of $0.62 per share for the current quarter, representing a 31.9% decline from the year-ago quarter, with the consensus estimate dropping 4.3% over the last 30 days. For the full fiscal year, the consensus earnings estimate stands at $2.84, down 66.9% from the prior year, while next year's estimate is projected at $3.13, indicating a 10.5% increase from current expectations. Despite the downward revision in earnings estimates, revenue growth remains robust with consensus sales of $295.63 million for the current quarter, up 17.2% year-over-year. Full fiscal year revenue is estimated at $1.21 billion (up 16.3%) and $1.36 billion for the next fiscal year (up 13%). The company recently reported revenues of $291.97 million, beating consensus by 1.19%, and EPS of $0.89, which exceeded estimates by 12.66%. Duolingo has beaten both earnings and revenue estimates for each of the trailing four quarters. Valuation analysis places Duolingo at a B grade on the Zacks Value Style Score, suggesting it trades at a discount to its peers. However, based on the size of the recent negative change in consensus earnings estimates and other factors, the proprietary Zacks Rank tool has assigned the stock a #4 (Sell) rating. This rating indicates that Duolingo may underperform the broader market in the near term despite its strong historical track record of beating expectations.