BofA Securities Downgrades Duolingo Inc. (DUOL) to Neutral

BofA Securities analyst Curtis Nagle downgraded Duolingo Inc. (NASDAQ: DUOL) from Buy to Neutral with a price target of $375.00 (from $355.00).

The analyst comments "We downgrade Duolingo (DUOL) to Neutral given less upside potential as shares are now trading at peak valuation and NT estimate revisions may be lower than in prior quarters. We continue to see Duolingo as one of the highest quality and most consistent growth names within Internet and we see potential for 40% EBITDA margins (vs. 26% now) and over 20% GAAP net income margins (vs. 13% now) over the long-term. Duolingo’s ability to grow users virally (marketing is only 11% of sales vs. 15% for sub peers), nearly doubling subscribers as a percent of users, scaling int’l markets and expanding high ARPU tiers such as Duolingo Max are all compelling long-term growth opportunities. However, with shares now trading at 14/46x 2026 EV/Sales and EV/EBITDA, we believe this is largely priced into shares. Reflecting higher sector valuation, we raise our PO slightly to $375. now based on 14x ’26 EV/sales (from $355 on 13x)."

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 $361.83 yesterday.

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