Key takeout
- Duolingo’s stock reached a new high on Friday after the language learning platform exceeded estimates for the first quarter.
- The company’s revenues, profits, and user numbers all surpassed predictions, leading Duolingo to raise its revenue forecast for the year.
- Analysts at JPMorgan noted potential for Duolingo’s user base, increasing its price target from $360 to $500.
Duolingo (Duol) shares soared to an all-time peak on Friday, following an impressive earnings report that exceeded first-quarter expectations.
After market close on Thursday, Duolingo announced earnings per share of $0.72, with revenue climbing 38% year-over-year to reach $230 million.
The company also saw a significant growth in paid subscribers, now at 10.3 million, and daily active users have jumped nearly 50%, totaling 46.6 million. Both figures significantly outperformed forecasts.
In addition, Duolingo raised its annual revenue forecast, now estimating between $996 million and $987 million, up from a previous range of $962.5 million to $978.5 million.
Following this news, Duolingo’s shares climbed 19% to over $477, even hitting an intraday record of $480 during the trading session.
Duolingo’s daily active users have room for further growth, according to JPMorgan
In a note following the earnings report, JPMorgan analysts reiterated their “overweight” rating and elevated their price target to $500 from $360. This new target is roughly $446 above the current consensus. Analysts believe that Duolingo’s daily active users can continue to grow, particularly through increased interest in English lessons and the upcoming non-verbal content, like chess courses.
Moreover, analysts highlighted that Duolingo has recently expanded its language offerings, more than doubling its library with 148 new language courses, thanks in part to educational content developed by AI.
