Duolingo (NASDAQ:DUOL) Shares Gap Down After Analyst Downgrade

Duolingo, Inc. (NASDAQ:DUOL) shares gapped down prior to trading on Friday after Needham & Company LLC lowered their price target on the stock from $300.00 to $145.00. The stock had previously closed at $117.45, but opened at $92.26. Needham & Company LLC currently has a buy rating on the stock. Duolingo shares last traded at $100.5630, with a volume of 10,397,381 shares changing hands.

A number of other equities analysts have also recently weighed in on DUOL. Scotiabank reduced their price target on Duolingo from $600.00 to $300.00 and set a “sector outperform” rating for the company in a report on Thursday, November 6th. Barclays reduced their target price on Duolingo from $390.00 to $230.00 and set an “equal weight” rating for the company in a research note on Thursday, November 6th. Evercore set a $330.00 price target on shares of Duolingo and gave the company an “outperform” rating in a research note on Thursday, November 6th. JPMorgan Chase & Co. reduced their price objective on shares of Duolingo from $300.00 to $200.00 and set an “overweight” rating for the company in a research report on Tuesday, January 20th. Finally, BMO Capital Markets upgraded shares of Duolingo to a “buy” rating in a research report on Monday, January 12th. Six investment analysts have rated the stock with a Buy rating, sixteen have issued a Hold rating and one has issued a Sell rating to the company. Based on data from MarketBeat.com, the stock presently has a consensus rating of “Hold” and an average price target of $232.37.

Insiders Place Their Bets

In other news, General Counsel Stephen C. Chen sold 1,901 shares of the firm’s stock in a transaction on Wednesday, February 18th. The stock was sold at an average price of $113.26, for a total transaction of $215,307.26. Following the completion of the transaction, the general counsel directly owned 30,545 shares in the company, valued at $3,459,526.70. This trade represents a 5.86% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available at the SEC website. Also, insider Natalie Glance sold 3,545 shares of the firm’s stock in a transaction dated Wednesday, February 18th. The shares were sold at an average price of $113.51, for a total value of $402,392.95. Following the transaction, the insider owned 115,380 shares of the company’s stock, valued at $13,096,783.80. This trade represents a 2.98% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders sold a total of 14,939 shares of company stock valued at $1,676,291 over the last 90 days. Company insiders own 15.67% of the company’s stock.

Duolingo News Summary

Here are the key news stories impacting Duolingo this week:

• Positive Sentiment: Q4 beat and user growth — Duolingo reported stronger-than-expected Q4 revenue and EPS and said it closed 2025 with 50M+ daily active users and over $1B in bookings, which supports long-term growth credibility. Press Release
• Positive Sentiment: Needham keeps a buy rating despite cutting its target — Needham trimmed its price target from $300 to $145 but maintained a “buy” rating, signaling some investors/analysts still see upside if user-growth strategy succeeds. Benzinga
• Neutral Sentiment: Analyst reaffirms with lower targets — Several firms reaffirmed ratings but set targets below current levels (Evercore $114, Scotiabank $100, Citi $101), reflecting cautious near-term views even if views differ on long-term prospects.
• Negative Sentiment: Weak forward guidance and strategy shift — Management said it will sacrifice near-term revenue/bookings growth to reaccelerate user expansion; FY‑2026 and Q1 bookings/revenue guidance came in below Street expectations, prompting the strongest negative market reaction. Reuters
• Negative Sentiment: Market reaction and media scrutiny — Coverage highlights that management’s strategy shake-up spooked Wall Street and led to a sharp share decline as investors weigh slower near-term monetization. Barron’s
• Negative Sentiment: Rising short interest and investor litigation risk — Short interest rose materially in February and law firms have opened investigations into potential investor claims, adding downside risk and sentiment pressure. GlobeNewswire

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently bought and sold shares of the stock. EFG International AG purchased a new stake in Duolingo during the 4th quarter worth about $26,000. Atlantic Union Bankshares Corp acquired a new position in Duolingo during the 3rd quarter worth approximately $32,000. AlphaCentric Advisors LLC purchased a new stake in shares of Duolingo in the 4th quarter valued at approximately $33,000. Emerald Mutual Fund Advisers Trust acquired a new stake in shares of Duolingo in the 2nd quarter valued at $40,000. Finally, Farther Finance Advisors LLC grew its stake in shares of Duolingo by 82.2% during the third quarter. Farther Finance Advisors LLC now owns 133 shares of the company’s stock worth $43,000 after purchasing an additional 60 shares in the last quarter. 91.59% of the stock is currently owned by hedge funds and other institutional investors.

Duolingo Trading Down 14.8%

The stock has a market cap of $4.63 billion, a price-to-earnings ratio of 12.67, a P/E/G ratio of 0.60 and a beta of 0.86. The business’s 50 day moving average is $146.18 and its 200 day moving average is $226.19. The company has a debt-to-equity ratio of 0.07, a current ratio of 2.82 and a quick ratio of 2.82.

Duolingo Company Profile

Duolingo, Inc (NASDAQ:DUOL) is a technology-driven education company that operates a widely used language-learning platform. Founded in 2011 by Luis von Ahn and Severin Hacker, Duolingo offers a freemium service featuring bite-sized lessons, gamified exercises and adaptive learning algorithms. The company’s core product is its mobile and web application, which supports instruction in more than 40 languages, ranging from widely spoken tongues such as English and Spanish to lesser-taught options including Irish and Swahili.

In addition to its flagship language courses, Duolingo has expanded its product suite to include the Duolingo English Test, an on-demand, computer-based English proficiency exam designed for academic and professional admissions.