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

Duolingo, Inc. (NASDAQ:DUOL)’s share price gapped down before the market opened on Friday after DA Davidson lowered their price target on the stock from $170.00 to $85.00. The stock had previously closed at $117.45, but opened at $92.26. DA Davidson currently has a neutral rating on the stock. Duolingo shares last traded at $100.5630, with a volume of 10,397,381 shares changing hands.

Other equities analysts also recently issued reports about the company. BMO Capital Markets upgraded Duolingo to a “buy” rating in a research note on Monday, January 12th. The Goldman Sachs Group dropped their target price on Duolingo from $425.00 to $250.00 and set a “neutral” rating on the stock in a research report on Friday, November 7th. Needham & Company LLC reduced their price target on shares of Duolingo from $300.00 to $145.00 and set a “buy” rating for the company in a research report on Friday. UBS Group set a $245.00 price objective on shares of Duolingo in a research note on Monday, January 5th. Finally, Citizens Jmp lowered shares of Duolingo from a “market outperform” rating to a “hold” rating in a research report on Thursday, November 6th. Five research analysts have rated the stock with a Buy rating, seventeen have assigned a Hold rating and one has issued a Sell rating to the company. According to MarketBeat, the company currently has an average rating of “Hold” and a consensus price target of $220.26.

Insider Buying and Selling

In related news, General Counsel Stephen C. Chen sold 1,901 shares of the business’s stock in a transaction that occurred on Wednesday, February 18th. The stock was sold at an average price of $113.26, for a total transaction of $215,307.26. Following the completion of the transaction, the general counsel directly owned 30,545 shares in the company, valued at approximately $3,459,526.70. The trade was a 5.86% decrease in their position. The sale was disclosed in a legal filing with the SEC, which can be accessed through this link. Also, insider Natalie Glance sold 3,545 shares of the stock in a transaction that occurred 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 of the company’s stock, valued at $13,096,783.80. This represents a 2.98% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. In the last quarter, insiders have sold 14,939 shares of company stock valued at $1,676,291. Insiders own 15.67% of the company’s stock.

More Duolingo News

Here are the key news stories impacting Duolingo this week:

• Positive Sentiment: Q4 results beat estimates — revenue and EPS topped expectations and the company reported strong margin metrics. Earnings Report
• Positive Sentiment: User scale: Duolingo closed 2025 with >50M daily active users and topped $1B in bookings — evidence of continued product adoption. Shareholder Letter
• Positive Sentiment: Strong full-year profitability: reports note roughly $400M profit for 2025, underlining unit economics at scale. Profit Article
• Neutral Sentiment: Management is explicitly shifting to prioritize user growth over near-term monetization, saying bookings and revenue growth will slow as they aim for 100M DAUs by 2028. Reuters Strategy Piece
• Neutral Sentiment: Management set explicit DAU growth targets and framed short-term profitability trade-offs as part of a longer-term expansion plan. Seeking Alpha
• Negative Sentiment: Guidance disappointment: FY‑2026 and Q1 2026 revenue/bookings guidance came in below Street expectations, triggering sharp intraday selling. Guidance/Miss Report
• Negative Sentiment: Analyst downgrades and price-target cuts accelerated the sell-off (multiple firms cut targets and/or ratings after the call). Analyst Moves
• Negative Sentiment: Regulatory/litigation risk: investor law firms have launched probes into DUOL, increasing uncertainty and potential legal overhang. Investigation Alert
• Negative Sentiment: High-volume selling and negative press amplified moves — multiple outlets flagged a steep intraday decline and described investor concern over the strategy shift. Barron’s

Institutional Inflows and Outflows

Large investors have recently modified their holdings of the company. NewEdge Advisors LLC boosted its holdings in Duolingo by 1,868.2% in the 1st quarter. NewEdge Advisors LLC now owns 433 shares of the company’s stock worth $134,000 after buying an additional 411 shares during the period. Goldman Sachs Group Inc. lifted its position in shares of Duolingo by 123.9% in the first quarter. Goldman Sachs Group Inc. now owns 87,556 shares of the company’s stock valued at $27,190,000 after acquiring an additional 48,451 shares in the last quarter. Focus Partners Wealth lifted its position in shares of Duolingo by 28.3% in the first quarter. Focus Partners Wealth now owns 2,021 shares of the company’s stock valued at $628,000 after acquiring an additional 446 shares in the last quarter. Sumitomo Mitsui Trust Group Inc. bought a new position in shares of Duolingo in the second quarter worth about $865,000. Finally, Oppenheimer Asset Management Inc. purchased a new stake in shares of Duolingo during the second quarter worth about $437,000. Hedge funds and other institutional investors own 91.59% of the company’s stock.

Duolingo Price Performance

The firm has a 50-day moving average of $144.48 and a 200-day moving average of $224.53. The stock has a market cap of $4.67 billion, a PE ratio of 12.80, a PEG ratio of 0.63 and a beta of 0.86. The company has a debt-to-equity ratio of 0.07, a current ratio of 2.82 and a quick ratio of 2.82.

About Duolingo

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.