Duolingo Inc (DUOL US) outlook
Hi, I just want to ask your opinion on Duolingo (DUOL US). Thank you.
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Answer
Hi Sue,
Duolingo is an AI-powered learning platform that monetises through subscriptions, ads, and testing services — best known for its highly engaging, gamified approach to language learning. The stock has been under significant pressure in recent months, tumbling ~70%, in a market that is still relatively close to its all-time high.
Wall Street has soured on the stock, even though its recent 3rd quarter revenue beat expectations, with daily active users growing +36% YoY to 50.2mn. The key reason for the pivot on the stock was the company’s strategic shift which triggered a wave of downgrades from the likes of Goldman, JP Morgan, and Wells Fargo. With monetisation moved to the “back burner” amid plans to increase spending on long-term investments and marketing, such as its social media content has seen investors toss the stock into the too hard basket.
With Co-Founder Severin Hacker selling $US1.7mn worth of stock this week, after 7 consecutive down days, we see little reason to get too excited at this point.
- MM has no interest in Duolingo at this stage of its evolution but it’s one to watch.
