Duolingo Inc. (DUOL) PT Lowered to $405 at Scotiabank

Scotiabank analyst Nat Schindler lowered the price target on Duolingo Inc. (NASDAQ: DUOL) to $405.00 (from $425.00) while maintaining a Sector Outperform rating.

The analyst commented: "DUOL entered 1Q25 with a clean setup, and is set to report results Thursday, May 1st (AMC). DAU growth is slowing a bit – as expected – but the mix is improving, Max is expanding, and English learners are engaging with premium features at 2x the rate of other users. While headline DAU growth is normalizing, monetization levers are starting to matter. And DAU/MAU is increasing, driven by stickier cohorts like Max users and English learners. Family plan hit 23% of subs last quarter and appears to be lifting retention. Max is still early (~5% of subs as of 4Q24), but early LTV looks solid, and cost pressures tied to AI are expected to ease in 2H25. The bigger unlock is English learner monetization. With intermediate/advanced content now live across 20+ English courses, DUOL is finally in a position to convert a large group of English learners it hasn’t fully monetized in the past – starting with 2M+ DAUs already engaging with the new content. The guide (~28% bookings growth, ~25% EBITDA margin) looks beatable if conversion held post-New Year’s and Max momentum continued. The real question is whether DUOL can keep lifting ARPU while managing costs – if so, we see room for both top- and bottom-line upside this year."

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