Curtis Nagle, an analyst from Bank of America Securities, maintained the Hold rating on Duolingo. The associated price target remains the same with $450.00.
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Curtis Nagle has given his Hold rating due to a combination of factors influencing Duolingo’s current market position. The company reported strong second-quarter results, with revenue and EBITDA exceeding expectations, driven by a favorable subscription mix and operational efficiencies. However, despite these positive financial metrics, user growth metrics such as Daily Active Users (DAU) and Monthly Active Users (MAU) were below expectations, partly due to limited marketing activities.
While Duolingo’s management has raised its full-year guidance, indicating confidence in future performance, the stock is currently trading at a premium valuation. This suggests that much of the anticipated growth is already reflected in the stock price. Additionally, while there are potential growth drivers such as the introduction of new features and courses, these are yet to significantly impact financials. Therefore, Nagle maintains a Hold rating, reflecting a balanced view of the company’s strengths and challenges.
Nagle covers the Consumer Cyclical sector, focusing on stocks such as Wayfair, Chewy, and RH. According to TipRanks, Nagle has an average return of -5.2% and a 45.11% success rate on recommended stocks.
In another report released today, Barclays also maintained a Hold rating on the stock with a $390.00 price target.