In a report released today, Ryan MacDonald from Needham reiterated a Buy rating on Duolingo (DUOL – Research Report), with a price target of $241.00.
Ryan MacDonald’s rating is based on the impressive performance of Duolingo in the fourth quarter of 2023, where the company exceeded expectations in bookings, primarily due to the successful adoption of its Family Plan and an effective New Year’s promotion. Moreover, while there has been a noted deceleration in daily active user growth, the company’s revenue and adjusted EBITDA forecasts have surpassed consensus estimates. This suggests that Duolingo could potentially continue to achieve commendable financial efficiency, potentially qualifying it as a Rule of 60+ company for the fiscal year 2024.
Additionally, MacDonald appreciates Duolingo’s consistent strong execution and believes that its solid fundamental profile justifies a higher market multiple. His price target of $241 is based on an enterprise value to sales multiple of 15.3 times the fiscal year 2024 estimates, which is bolstered by a discounted cash flow analysis. MacDonald’s assessment underscores his confidence in Duolingo’s ongoing strength, leading him to encourage investors to buy the stock.
MacDonald covers the Technology sector, focusing on stocks such as Zeta Global Holdings Corp, Verint Systems, and Chegg. According to TipRanks, MacDonald has an average return of 8.9% and a 50.11% success rate on recommended stocks.
In another report released on February 27, Seaport Global also initiated coverage with a Buy rating on the stock with a $183.74 price target.
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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.
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