Duolingo should buy Chess.com, says DA Davidson

DA Davidson keeps a Neutral rating and $220 price target on Duolingo (DUOL) while noting that the company should buy Chess.com in order to further establish chess as a core offering on the platform and create a more liquid PvP offering. The company’s new Chess offering is now larger than math and music, and the firm estimates that Chess drove an outsized portion of q/q DAU growth, the analyst tells investors in a research note. In Duolingo’s current state, it will lose users to Chess.com, but if it were to acquire / partner with Chess.com, thefirm would be “substantially more positive” on the company’s longer-term chess opportunity, DA Davidson added.