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Duolingo, Inc. (DUOL) Stock Falls Amid Market Uptick: What Investors Need to Know

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In the latest trading session, Duolingo, Inc. (DUOL - Free Report) closed at $178.94, marking a -3.35% move from the previous day. The stock fell short of the S&P 500, which registered a gain of 0.62% for the day. At the same time, the Dow added 0.99%, and the tech-heavy Nasdaq gained 0.65%.

The stock of company has fallen by 10.95% in the past month, lagging the Business Services sector's gain of 1.64% and the S&P 500's gain of 0.59%.

Market participants will be closely following the financial results of Duolingo, Inc. in its upcoming release. The company is forecasted to report an EPS of $0.78, showcasing a 151.61% upward movement from the corresponding quarter of the prior year. Simultaneously, our latest consensus estimate expects the revenue to be $275.88 million, showing a 31.65% escalation compared to the year-ago quarter.

For the full year, the Zacks Consensus Estimates are projecting earnings of $8.37 per share and revenue of $1.03 billion, which would represent changes of +345.21% and 0%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Duolingo, Inc. These revisions typically reflect the latest short-term business trends, which can change frequently. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. The Zacks Consensus EPS estimate has moved 1.53% lower within the past month. At present, Duolingo, Inc. boasts a Zacks Rank of #3 (Hold).

Looking at its valuation, Duolingo, Inc. is holding a Forward P/E ratio of 45.45. Its industry sports an average Forward P/E of 16.62, so one might conclude that Duolingo, Inc. is trading at a premium comparatively.

It is also worth noting that DUOL currently has a PEG ratio of 0.95. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Technology Services was holding an average PEG ratio of 1.49 at yesterday's closing price.

The Technology Services industry is part of the Business Services sector. This industry, currently bearing a Zacks Industry Rank of 161, finds itself in the bottom 35% echelons of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow DUOL in the coming trading sessions, be sure to utilize Zacks.com.


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