Duolingo (DUOL) has received a new Buy rating, initiated by Seaport Global analyst, Aaron Kessler.
Aaron Kessler has given his Buy rating due to a combination of factors which underscore Duolingo’s strong position in the burgeoning online language learning market. He recognizes Duolingo as a clear market leader in a sector that is increasingly moving towards digital platforms. Kessler is optimistic about the company’s ability to sustain long-term revenue growth exceeding 20%, propelled by the company’s successful freemium model, particularly in international markets, its growing paid subscriber base, and the potential of new product offerings like its math and literacy tools, as well as the Duolingo English Test.
Furthermore, Kessler’s analysis suggests that Duolingo is on track to achieve a long-term EBITDA margin of over 35%, benefitting from the inherent scalability of its freemium business model. This model provides cost-effective user acquisition and could result in sales and marketing efficiencies. Additionally, he anticipates that Duolingo will gain increasing leverage from its research and development investments, which will further contribute to its financial performance and justify a target price of $222, based on 12 times the company’s projected 2025 revenues.
According to TipRanks, Kessler is a top 100 analyst with an average return of 18.2% and a 64.44% success rate.
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Duolingo (DUOL) Company Description:
Duolingo Inc is a mobile learning platform to learn languages and the top-grossing app in the Education category on both Google Play and the Apple App Store. It has three predominant sources of revenue; time-based subscriptions, in-app advertising placement by third parties, and the Duolingo English Test.
Read More on DUOL:
- Can Duolingo Stock (NASDAQ:DUOL) Generate Multi-Bagger Returns?
- Duolingo to Announce Fourth Quarter and Full Year 2023 Results on Wednesday, February 28, 2024
- Educational Tech Stocks Take a Hit amid AI Fears
- Duolingo downgraded to Sell from Neutral at Goldman Sachs
- Duolingo price target raised to $230 from $193 at BofA
