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Investing.com - Citizens JMP maintained its Market Outperform rating and $500.00 price target on Duolingo Inc. (NASDAQ:DUOL), currently trading at $285.91 with a market cap of $13.1 billion, on Thursday. According to InvestingPro, the company maintains a "GREAT" financial health score, supported by strong operational metrics.
The firm highlighted that Duolingo is directing new subscribers to its open web platform rather than processing subscriptions through app stores, which could represent approximately 10% upside to the company’s 2027 EBITDA.
Citizens JMP’s analysis uses 2027 subscription revenue consensus of $1.4 billion and applies Apple’s 60.7% share of total revenue from Q2 2025, along with Duolingo’s 2024 U.S. revenue mix of 41.6%. The firm factors in a 5% conversion headwind due to the increased friction of moving users to web platforms.
The firm calculates potential savings of $56.5 million by replacing Apple’s estimated 20% take rate with Stripe’s approximately 3% processing fee, representing a 10.1% uplift to 2027 consensus EBITDA.
Citizens JMP acknowledges this estimate may be somewhat overstated as it doesn’t account for renewals, noting that based on previous analysis, approximately 60% of subscribers are new each year, suggesting a high-single-digit uplift to EBITDA for 2027.
In other recent news, Duolingo has been the focus of several analyst updates and product developments. JPMorgan has raised its price target for Duolingo to $515, maintaining an Overweight rating. This adjustment is attributed to Duolingo’s advancements in generative AI, stable daily active user trends, and increased monetization of its Max subscription tier. Similarly, Morgan Stanley reiterated its Overweight rating and $500 price target, addressing investor concerns over competition from OpenAI’s new language learning tools. KeyBanc upgraded Duolingo to Overweight with a $460 price target, viewing the recent AI backlash as a temporary issue. Meanwhile, Baird initiated coverage with a Neutral rating and a $280 price target, acknowledging Duolingo’s innovation and strong brand presence. In a related development, Google Translate has introduced AI language learning features, though Duolingo’s stock remained unaffected by this announcement. These updates reflect ongoing interest and analysis from major investment firms regarding Duolingo’s market position and technological advancements.
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