Citizens JMP lowers Duolingo stock price target to $450 on engagement concerns

Published 28/07/2025, 10:04
Citizens JMP lowers Duolingo stock price target to $450 on engagement concerns

Investing.com - Citizens JMP lowered its price target on Duolingo Inc. (NASDAQ:DUOL) to $450 from $475 while maintaining a Market Outperform rating ahead of the company’s second-quarter earnings report, due August 6. The language learning platform, currently trading at $364.09, has delivered an impressive 110% return over the past year.

The firm cited concerns about slowing user engagement since April, based on third-party data that suggests a temporary slowdown in platform activity during the second quarter of 2025. According to InvestingPro data, however, the company maintains strong fundamentals with a 72% gross profit margin and revenue growth of 39% in the last twelve months.

Despite the near-term caution, Citizens JMP expressed confidence that the engagement issues would be temporary and expected growth to rebound, maintaining its positive long-term outlook on Duolingo’s business prospects.

The firm continues to view Duolingo as "an AI winner" with technology advances supporting content expansion and new products like Video Calls, positioning the company to capitalize on teaching subjects that require extended learning periods.

Citizens JMP characterized the second-quarter execution challenges as a potential opportunity for investors following the earnings report, leading to its decision to maintain the Market Outperform rating despite the price target reduction.

In other recent news, Duolingo Inc. is preparing for its upcoming earnings report, with UBS maintaining a Buy rating and a $500 price target, despite some caution. UBS has kept its fiscal year 2025 bookings and EBITDA growth estimates at 30% and $288 million, respectively, aligning closely with the Street consensus. Meanwhile, JPMorgan has lowered its price target for Duolingo to $500 from $580, citing concerns over user growth and subscription bookings. Evercore ISI, on the other hand, has increased its price target to $540, following favorable market trends observed in their surveys. DA Davidson also adjusted its price target to $500, maintaining a Buy rating based on their growth analysis. Additionally, Duolingo shareholders recently approved the election of three Class I directors and the company’s auditor at the 2025 Annual Meeting. The meeting had a significant turnout, with over 97% of voting power represented. These developments reflect ongoing investor interest and strategic adjustments in response to market conditions.

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