Bullish Outlook on Duolingo: Growth Potential in the Language Learning Industry

Morgan Stanley analyst Nathan Feather has maintained their bullish stance on DUOL stock, giving a Buy rating on May 6.

Nathan Feather has given his Buy rating due to a combination of factors that highlight Duolingo’s potential for growth and monetization. Despite some concerns regarding Duolingo’s ability to cater to advanced English learners, Feather sees a significant opportunity for the company to expand its market share in the $115 billion direct-to-consumer language learning industry. Duolingo’s recent efforts in research and development have focused on improving its offerings for intermediate and advanced English courses, which have already shown promising engagement metrics.
Moreover, Duolingo’s innovative features, such as the Video Call, have demonstrated higher engagement among English learners, suggesting a strong product-market fit. This engagement is expected to drive higher subscription rates for Duolingo’s Max tier, potentially reaching 5% of monthly active users and generating substantial revenue. Feather’s analysis indicates that these factors, combined with Duolingo’s strategic focus on monetizing its features, support a bullish outlook for the company’s stock.

In another report released on May 6, J.P. Morgan also maintained a Buy rating on the stock with a $500.00 price target.

Based on the recent corporate insider activity of 105 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of DUOL in relation to earlier this year.