Intel stock extends gains after report of possible U.S. government stake
On Friday, JPMorgan updated its financial outlook for language learning platform Duolingo Inc. (NASDAQ: NASDAQ:DUOL), increasing the price target from $400 to $410, while keeping an Overweight rating on the stock. The revision follows a trading session where Duolingo shares fell by 7% after the market closed, due to the company’s 2025 Bookings and Adjusted EBITDA guidance falling slightly short of high investor expectations. According to InvestingPro data, Duolingo maintains impressive financial health with a "GREAT" overall score and strong revenue growth of 40.84% over the last twelve months.
Despite the initial negative reaction to the guidance, JPMorgan remains optimistic about Duolingo’s growth trajectory, particularly highlighting the potential of its AI-driven product cycle spearheaded by its feature, Max. Max has already captured around 5% of Duolingo’s paid subscribers as the company enters 2025. With a robust gross profit margin of 72.78% and strong liquidity position, as revealed by InvestingPro’s comprehensive analysis, the company appears well-positioned to fund its AI initiatives.
The firm is confident that the number of Max paid subscribers will triple over the course of the year, bolstered by improvements to Video Call functionalities, deeper engagement with English learners, increased international monetization efforts, and an acceleration in content production and engineering processes. JPMorgan forecasts that Max will reach 1.37 million paid subscribers in 2025, accounting for 11% of Duolingo’s total subscriber base and contributing $176.9 million in Bookings, which would represent 18% of Subscription Bookings.
JPMorgan’s analysis suggests that Duolingo is on a path to significant growth in its paid subscriber base, driven by the ongoing development and expansion of its AI offerings. The firm’s raised price target reflects confidence in Duolingo’s ability to capitalize on these advancements and scale its user base effectively throughout 2025.
In other recent news, Duolingo Inc. reported fourth-quarter earnings for 2024, with revenue reaching $209.6 million, surpassing the forecast of $205 million. This strong financial performance was accompanied by a 42% year-over-year increase in total bookings and a 39% rise in revenue. Despite these positive results, Duolingo’s stock experienced a decline in aftermarket trading. The company has introduced new AI-powered features and expects to exceed $1 billion in bookings by 2025. Analysts from DA Davidson, Needham, and Piper Sandler have all raised their price targets for Duolingo shares, with DA Davidson and Needham setting targets at $400 and Piper Sandler at $390. These adjustments reflect Duolingo’s impressive growth in daily active users and subscription bookings. The company’s new subscription service, Duolingo Max, has been a significant contributor to revenue growth, now representing 5% of total subscribers. Duolingo’s expansion into math and music courses is also gaining traction, with 3 million daily active users, indicating potential for further growth in these areas.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.