Duolingo (NASDAQ:DUOL) Trading Down 4.5% – What’s Next?

Duolingo, Inc. (NASDAQ:DUOL)’s share price dropped 4.5% on Tuesday . The stock traded as low as $127.15 and last traded at $127.82. 232,742 shares changed hands during trading, a decline of 89% from the average session volume of 2,097,780 shares. The stock had previously closed at $133.89.

Analysts Set New Price Targets

Several equities research analysts recently issued reports on the stock. Jefferies Financial Group raised their target price on shares of Duolingo from $95.00 to $125.00 and gave the company a “hold” rating in a research note on Tuesday, July 14th. KeyCorp reissued a “sector weight” rating on shares of Duolingo in a research report on Thursday, June 4th. DA Davidson restated a “neutral” rating and issued a $120.00 price objective on shares of Duolingo in a research note on Monday, June 29th. Morgan Stanley raised their price objective on Duolingo from $95.00 to $125.00 and gave the company an “equal weight” rating in a research report on Thursday. Finally, JPMorgan Chase & Co. lifted their target price on Duolingo from $94.00 to $125.00 and gave the stock a “neutral” rating in a research note on Friday. Two investment analysts have rated the stock with a Buy rating, twenty have given a Hold rating and one has assigned a Sell rating to the company. According to MarketBeat, the company presently has a consensus rating of “Hold” and an average price target of $167.17.

Duolingo Stock Performance

The company has a market cap of $5.86 billion, a P/E ratio of 14.48, a price-to-earnings-growth ratio of 1.03 and a beta of 0.88. The stock has a 50 day moving average price of $119.52 and a two-hundred day moving average price of $118.56. The company has a quick ratio of 2.62, a current ratio of 2.62 and a debt-to-equity ratio of 0.07.

Duolingo (NASDAQ:DUOL) last released its quarterly earnings results on Monday, May 4th. The company reported $0.89 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.79 by $0.10. Duolingo had a return on equity of 14.07% and a net margin of 38.44%.The business had revenue of $291.97 million during the quarter, compared to the consensus estimate of $288.60 million. During the same period in the previous year, the company posted $0.72 EPS. The firm’s quarterly revenue was up 26.5% on a year-over-year basis. On average, research analysts predict that Duolingo, Inc. will post 2.8 earnings per share for the current fiscal year.

Insider Activity

In related news, General Counsel Stephen C. Chen sold 1,977 shares of the firm’s stock in a transaction dated Monday, May 18th. The shares were sold at an average price of $113.61, for a total transaction of $224,606.97. Following the transaction, the general counsel directly owned 52,807 shares of the company’s stock, valued at approximately $5,999,403.27. This trade represents a 3.61% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, insider Robert Meese sold 1,420 shares of Duolingo stock in a transaction dated Friday, May 15th. The stock was sold at an average price of $112.16, for a total transaction of $159,267.20. Following the completion of the sale, the insider owned 170,745 shares of the company’s stock, valued at $19,150,759.20. This trade represents a 0.82% decrease in their position. The SEC filing for this sale provides additional information. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Over the last 90 days, insiders sold 9,506 shares of company stock valued at $1,073,864. 16.62% of the stock is owned by company insiders.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently made changes to their positions in DUOL. Generali Investments Management Co LLC bought a new position in shares of Duolingo during the second quarter worth approximately $565,000. Everhart Financial Group Inc. bought a new stake in shares of Duolingo in the second quarter valued at approximately $313,000. FNY Investment Advisers LLC bought a new stake in shares of Duolingo in the second quarter valued at approximately $34,000. GAMMA Investing LLC grew its position in Duolingo by 103.1% during the second quarter. GAMMA Investing LLC now owns 1,324 shares of the company’s stock worth $152,000 after buying an additional 672 shares in the last quarter. Finally, Pacer Advisors Inc. grew its position in Duolingo by 416.0% during the first quarter. Pacer Advisors Inc. now owns 238,458 shares of the company’s stock worth $23,505,000 after buying an additional 192,245 shares in the last quarter. Institutional investors and hedge funds own 91.59% of the company’s stock.

About Duolingo

Duolingo, Inc (NASDAQ:DUOL) is a technology-driven education company that operates a widely used language-learning platform. Founded in 2011 by Luis von Ahn and Severin Hacker, Duolingo offers a freemium service featuring bite-sized lessons, gamified exercises and adaptive learning algorithms. The company’s core product is its mobile and web application, which supports instruction in more than 40 languages, ranging from widely spoken tongues such as English and Spanish to lesser-taught options including Irish and Swahili.

In addition to its flagship language courses, Duolingo has expanded its product suite to include the Duolingo English Test, an on-demand, computer-based English proficiency exam designed for academic and professional admissions.