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Investing.com - Evercore ISI has raised its price target on Duolingo Inc. (NASDAQ:DUOL) to $540 from $480 while maintaining an Outperform rating on the language learning platform. The stock, which has delivered a remarkable 97% return over the past year, currently trades at $409.66. According to InvestingPro analysis, Duolingo appears overvalued at current levels.
The price target increase follows strong results from Evercore’s second annual U.S. Duolingo survey and its first survey in Germany, which demonstrated clear market trends favoring the company.
Evercore’s updated valuation framework now extends to 2027, using multiples of 45x estimated 2027 EV/EBITDA and 45x 2027 P/FCF to arrive at the new target.
The research firm noted that online platforms are increasingly becoming the preferred method for language learning, with Duolingo establishing itself as the growing market leader in the online language learning sector.
Evercore highlighted Duolingo’s competitive advantages in selection, user satisfaction, and premium offerings, which it believes provides the company with "substantial ARPU power" - referring to average revenue per user.
In other recent news, Duolingo reported noteworthy developments that could impact investor decisions. DA Davidson conducted an analysis of Duolingo’s user growth, revealing that the company’s daily active user growth in the second quarter is surpassing both market consensus and the company’s own guidance. This led DA Davidson to raise its price target for Duolingo to $600, maintaining a "Buy" rating. Similarly, JPMorgan increased its price target for Duolingo to $580, citing strong growth in bookings and revenue, driven by the company’s effective user conversion and product development strategies.
At Duolingo’s 2025 Annual Meeting of Stockholders, shareholders approved all proposals, including the election of board members and the ratification of Deloitte & Touche LLP as the independent auditor. Approximately 97.64% of the company’s voting power was represented, indicating strong shareholder support. Meanwhile, Apple (NASDAQ:AAPL) announced a new Live Translation feature, which some investors perceive as potential competition for Duolingo’s services. Despite these competitive concerns, analysts remain optimistic about Duolingo’s growth trajectory and market position.
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