Shares of language app Duolingo Inc (NASDAQ:DUOL) tanked in early trading on Thursday, even after the company reported upbeat second-quarter (Q2) results.
Here are the key analyst takeaways:
- DA Davidson analyst Wyatt Swanson reiterated a Neutral, while raising the price target from $120 to $130.
- Needham analyst Ryan MacDonald maintained a Buy rating and price target of $145.
Check out other analyst stock ratings.
DA Davidson: Duolingo reported solid results for the Q2, with DAU (daily active user) growth and bookings coming in ahead of consensus estimates, Swanson said in a note. He highlighted the following from the release:
- Bookings growth of 7.9% year-on-year topped consensus of 6.5%
- Revenue growth of 18.3% year-on-year came in higher than consensus of 17.3%
- Although adjusted EBITDA of $77.3 million represented a year-on-year contraction, the figure was higher than expectations of $72.4 million.
Management guided to Q3 bookings of $307 million, up 8.9%, while DAU growth is expected to remain above 20% year-on-year, the analyst stated.
The Pittsburgh, Pennsylvania-based company raised its 2026 bookings guidance from $1.28 billion, representing 10.5% growth, to $1.285 billion, indicating 10.9% growth, he added.
Duolingo expects adjusted EBITDA to be $320 million (26.5% margin). Previously, it hovered at $310 million (25.7% margin). Swanson credited this to “updated AI cost trends.”
Needham: Duolingo accelerated DAU growth to 23% from 21.2% in the previous quarter, providing a “good proof point” that its growth-focused strategy is working, MacDonald said.
Paid subscribers came in at 12.7 million for the quarter, slightly below consensus of 12.76 million, the analyst stated.
Duolingo raised full-year projections for bookings and revenues only slightly. The company continues to focus on DAU growth rather than monetization, MacDonald added.
DUOL Price Action: Shares of Duolingo had declined by 8.53% to $123.78 at the time of publication on Thursday.
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