Duolingo (NASDAQ:DUOL) Shares Gap Down Following Analyst Downgrade

Duolingo, Inc. (NASDAQ:DUOL) gapped down prior to trading on Friday after Needham & Company LLC lowered their price target on the stock from $300.00 to $145.00. The stock had previously closed at $117.45, but opened at $92.26. Needham & Company LLC currently has a buy rating on the stock. Duolingo shares last traded at $100.5630, with a volume of 10,397,381 shares changing hands.

Other equities research analysts have also recently issued reports about the stock. Evercore set a $330.00 target price on shares of Duolingo and gave the company an “outperform” rating in a report on Thursday, November 6th. The Goldman Sachs Group decreased their target price on shares of Duolingo from $425.00 to $250.00 and set a “neutral” rating on the stock in a research report on Friday, November 7th. Morgan Stanley lowered their price target on Duolingo from $275.00 to $245.00 and set an “overweight” rating on the stock in a report on Tuesday, February 3rd. Citigroup restated a “market perform” rating on shares of Duolingo in a report on Monday, January 12th. Finally, JPMorgan Chase & Co. cut their price target on Duolingo from $300.00 to $200.00 and set an “overweight” rating for the company in a report on Tuesday, January 20th. Six research analysts have rated the stock with a Buy rating, sixteen have given a Hold rating and one has given a Sell rating to the stock. According to MarketBeat, the stock presently has an average rating of “Hold” and a consensus target price of $232.37.

Insider Activity at Duolingo

In other news, insider Natalie Glance sold 3,545 shares of the company’s stock in a transaction on Wednesday, February 18th. The stock was sold at an average price of $113.51, for a total transaction of $402,392.95. Following the completion of the sale, the insider directly owned 115,380 shares in the company, valued at $13,096,783.80. This represents a 2.98% decrease in their position. The transaction was disclosed in a filing with the SEC, which is available at this link. Also, CFO Matthew Skaruppa sold 3,986 shares of the stock in a transaction on Wednesday, February 18th. The stock was sold at an average price of $113.52, for a total value of $452,490.72. Following the completion of the transaction, the chief financial officer directly owned 31,631 shares in the company, valued at $3,590,751.12. This trade represents a 11.19% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last three months, insiders sold 14,939 shares of company stock worth $1,676,291. 15.67% of the stock is currently owned by company insiders.

Trending Headlines about Duolingo

Here are the key news stories impacting Duolingo this week:

• Positive Sentiment: Q4 beat and user growth — Duolingo reported stronger-than-expected Q4 revenue and EPS and said it closed 2025 with 50M+ daily active users and over $1B in bookings, which supports long-term growth credibility. Press Release
• Positive Sentiment: Needham keeps a buy rating despite cutting its target — Needham trimmed its price target from $300 to $145 but maintained a “buy” rating, signaling some investors/analysts still see upside if user-growth strategy succeeds. Benzinga
• Neutral Sentiment: Analyst reaffirms with lower targets — Several firms reaffirmed ratings but set targets below current levels (Evercore $114, Scotiabank $100, Citi $101), reflecting cautious near-term views even if views differ on long-term prospects.
• Negative Sentiment: Weak forward guidance and strategy shift — Management said it will sacrifice near-term revenue/bookings growth to reaccelerate user expansion; FY?2026 and Q1 bookings/revenue guidance came in below Street expectations, prompting the strongest negative market reaction. Reuters
• Negative Sentiment: Market reaction and media scrutiny — Coverage highlights that management’s strategy shake-up spooked Wall Street and led to a sharp share decline as investors weigh slower near-term monetization. Barron’s
• Negative Sentiment: Rising short interest and investor litigation risk — Short interest rose materially in February and law firms have opened investigations into potential investor claims, adding downside risk and sentiment pressure. GlobeNewswire

Hedge Funds Weigh In On Duolingo

A number of hedge funds have recently made changes to their positions in DUOL. New York Life Investment Management LLC raised its holdings in shares of Duolingo by 0.7% during the 2nd quarter. New York Life Investment Management LLC now owns 4,067 shares of the company’s stock valued at $1,668,000 after buying an additional 30 shares during the period. Meiji Yasuda Asset Management Co Ltd. grew its position in shares of Duolingo by 3.5% in the 2nd quarter. Meiji Yasuda Asset Management Co Ltd. now owns 940 shares of the company’s stock worth $385,000 after acquiring an additional 32 shares in the last quarter. Evergreen Capital Management LLC raised its holdings in shares of Duolingo by 5.0% during the second quarter. Evergreen Capital Management LLC now owns 818 shares of the company’s stock worth $335,000 after purchasing an additional 39 shares during the period. Generali Investments Towarzystwo Funduszy Inwestycyjnych raised its stake in Duolingo by 22.2% during the third quarter. Generali Investments Towarzystwo Funduszy Inwestycyjnych now owns 220 shares of the company’s stock worth $71,000 after acquiring an additional 40 shares during the period. Finally, True Wealth Design LLC raised its position in shares of Duolingo by 38.6% during the 2nd quarter. True Wealth Design LLC now owns 176 shares of the company’s stock worth $72,000 after purchasing an additional 49 shares during the period. Hedge funds and other institutional investors own 91.59% of the company’s stock.

Duolingo Stock Down 14.8%

The company has a quick ratio of 2.82, a current ratio of 2.82 and a debt-to-equity ratio of 0.07. The firm’s 50-day moving average price is $146.18 and its 200 day moving average price is $226.19. The firm has a market cap of $4.63 billion, a P/E ratio of 12.67, a price-to-earnings-growth ratio of 0.60 and a beta of 0.86.

Duolingo Company Profile

Duolingo, Inc (NASDAQ:DUOL) is a technology-driven education company that operates a widely used language-learning platform. Founded in 2011 by Luis von Ahn and Severin Hacker, Duolingo offers a freemium service featuring bite-sized lessons, gamified exercises and adaptive learning algorithms. The company’s core product is its mobile and web application, which supports instruction in more than 40 languages, ranging from widely spoken tongues such as English and Spanish to lesser-taught options including Irish and Swahili.

In addition to its flagship language courses, Duolingo has expanded its product suite to include the Duolingo English Test, an on-demand, computer-based English proficiency exam designed for academic and professional admissions.