Duolingo, the Technology sector company, was revisited by a Wall Street analyst today. Analyst Nathan Feather from Morgan Stanley maintained a Buy rating on the stock and has a $480.00 price target.
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Nathan Feather has given his Buy rating due to a combination of factors that suggest Duolingo’s long-term growth potential remains strong despite recent short-term challenges. While there has been a noticeable slowdown in daily active user growth in the U.S., primarily due to social media reactions to Duolingo’s ‘AI-First’ initiative, international user trends have remained stable. This indicates that the impact of the pushback may be temporary.
Furthermore, the market seems to have already adjusted for these short-term risks, as evidenced by the re-rating of Duolingo’s EBITDA multiple. Feather believes that the company’s focus on expanding its English learner base and enhancing monetization strategies will drive future growth. Therefore, despite the tactical weakness expected in the upcoming quarterly results, the long-term outlook for Duolingo remains positive, justifying the Buy rating.
Feather covers the Consumer Cyclical sector, focusing on stocks such as Chewy, eBay, and Revolve Group. According to TipRanks, Feather has an average return of 25.6% and a 78.13% success rate on recommended stocks.
In another report released on July 1, Evercore ISI also maintained a Buy rating on the stock with a $540.00 price target.