JPMorgan Reiterates Overweight Rating on Duolingo Inc. (DUOL), 'Best Idea'

JPMorgan analyst Bryan Smilek reiterated an Overweight rating and $255.00 price target on Duolingo Inc. (NASDAQ: DUOL).

The analyst comments "We hosted an investor meeting with Duolingo co-founder, CEO & Chairman Luis von Ahn, CFO Matt Skaruppa, Chief Marketing Officer Manu Orssaud, & Chief Business Officer Robert Meese in NYC on Thursday. Our conversations focused on DUOL’s product cycle, English Learning, Duolingo Max, GenAI/LLMs, paid subscriber monetization, & DUOL’s marketing strategy. We come away incrementally positive & believe DUOL’s product cycle & marketing will drive strong DAU & subscriber growth, while Max rollout & English Learning investments will support multi-year topline expansion (L-T target of 25%+ Bookings growth). Our bull thesis remains: 1) Strong DAU growth driven by product optimizations, secular growth, efficient marketing, & improved user resurrection/retention; 2) Deeper conversions, Max, & Family Plan drive Paid Subscriber growth; 3) English Learning investments unlock 75%+ of the language learning TAM, w/growing contribution in 2025 & beyond; 4) GenAI/LLMs drive faster product innovation, expand content, & reduce costs; 5) new verticals extend LTV & support acquisition, engagement, & retention; & 6) multi-year Adj. EBITDA & FCF ramp, w/capital returns potential over time. Our estimates suggest 2025 & 2026 average growth of 25% for revenue, 38% for Adj. EBITDA & 27% for FCF. We reiterate our Overweight rating & our December 2025 PT of $255 is based on ~30x 2026E FCF of $398M, which equates to ~34x 2026E Adj. EBITDA of $346M. We summarize key discussion topics & our takeaways below, & we look for more updates at DuoCon on September 24th."

For an analyst ratings summary and ratings history on Duolingo Inc. click here. For more ratings news on Duolingo Inc. click here.

Shares of Duolingo Inc. closed at $210.26 yesterday.

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