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On Friday, Scotiabank (TSX:BNS) analyst Nat Schindler adjusted the price target for Duolingo Inc. (NASDAQ:DUOL) shares, raising it from $405.00 to $470.00. Schindler has maintained a Sector Outperform rating on the language-learning platform’s stock. This decision follows Duolingo’s robust performance at the beginning of the year, where the company surpassed expectations on several financial metrics and upgraded its full-year guidance for bookings, revenue, and adjusted EBITDA. According to InvestingPro data, the company maintains excellent financial health with strong growth metrics and holds more cash than debt on its balance sheet, supporting its ambitious expansion plans.
Duolingo reported a 38% year-over-year increase in bookings and a significant growth in its user base, with paid subscribers up by 40% to 10.3 million and daily active users (DAUs) increasing by 49% to 46.6 million. This growth has translated into impressive financial results, with revenue growing 40.84% over the last twelve months to $748 million, according to InvestingPro. The company’s premium offering, Duolingo Max, now accounts for 7% of total subscribers, with English learners adopting the service more rapidly as the company enhances intermediate content and personalizes learning experiences.
The company has been actively expanding its course offerings, launching 148 new courses this quarter through the use of artificial intelligence. This expansion is aimed at closing localization gaps and extending Duolingo’s international presence. Management highlighted strong user demand in key markets such as India, Brazil, and Indonesia. The company has maintained an impressive gross margin of 72.78%, and its adjusted EBITDA margin reached a record high of 27.2%, benefiting from early efficiencies gained in scaling AI technologies.
Duolingo is also diversifying its product suite, with the upcoming launch of a Chess course soon to follow the recently introduced Math and Music courses. These new offerings are already contributing millions of daily active users and are growing at a faster pace than Duolingo’s core language learning product. As the second quarter is traditionally weaker, investors are expected to closely monitor the continued monetization of English learners, the rate of Max upgrades, and the scalability of new AI-driven features, particularly in terms of their impact on profit margins. For deeper insights into Duolingo’s valuation and growth prospects, investors can access comprehensive analysis and 20 additional key ProTips through InvestingPro’s detailed research reports, which provide expert analysis on what really matters for this high-growth education technology leader.
In other recent news, Duolingo Inc. announced financial results for the first quarter of 2025 that exceeded analysts’ expectations. The company reported an earnings per share of $0.72, surpassing the forecast of $0.52, while revenue reached $230.7 million, above the anticipated $223.15 million. Following the announcement, DA Davidson raised its price target for Duolingo from $410 to $470, maintaining a Buy rating, citing the company’s strong performance in revenue and adjusted EBITDA. The firm noted Duolingo’s robust subscriber growth and successful premium offerings as key drivers of its financial results.
Duolingo’s management expressed confidence in the company’s resilience amid broader economic concerns, highlighting its global reach and freemium model as advantages. The company also provided second-quarter guidance, projecting a year-over-year daily active user growth of 40-45%, supported by ongoing product enhancements. Analysts at DA Davidson were particularly impressed by Duolingo’s strategic expansions into adjacent learning markets and its focus on AI-driven efficiencies for future growth.
Additionally, Duolingo expanded its educational offerings with new language courses and subjects, such as math and music, while emphasizing its commitment to diversifying its product lineup. The company’s forward guidance reflects optimism for continued revenue growth and a positive outlook for upcoming quarters. Duolingo’s CEO, Luis Von Ahn, highlighted the transformative potential of AI for the business, reinforcing the company’s focus on developing new features to enhance user engagement and revenue growth.
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