Duolingo upgraded to Overweight from Sector Weight at KeyBanc

KeyBanc analyst Justin Patterson upgraded Duolingo (DUOL) to Overweight from Sector Weight with a $460 price target The shares have underperformed on fears that a deceleration in engagement is a sign that the business is peaking and that artificial intelligence will contract its total addressable market, the analyst tells investors in a research note. However, Duolingo believes Duolingo has multiple growth drivers ahead and that AI innovations are more likely to help, than hurt, its monetization. The company’s combination of product updates and marketing efforts create upside risk to estimates over the next 12 months, contends KeyBanc. The firm also believes Duolingo’s price optimizations “remain an untapped growth lever” that could drive growth and profitability.