Back to top

Image: Bigstock

Duolingo, Inc. (DUOL) Increases Despite Market Slip: Here's What You Need to Know

Read MoreHide Full Article

In the latest close session, Duolingo, Inc. (DUOL - Free Report) was up +2.43% at $151.73. The stock outperformed the S&P 500, which registered a daily loss of 0.22%. Elsewhere, the Dow saw a downswing of 0.66%, while the tech-heavy Nasdaq depreciated by 0.22%.

Prior to today's trading, shares of the company had gained 1.19% outpaced the Business Services sector's loss of 4.73% and lagged the S&P 500's gain of 1.4%.

The investment community will be closely monitoring the performance of Duolingo, Inc. in its forthcoming earnings report. The company is predicted to post an EPS of $0.55, indicating a 42.11% decline compared to the equivalent quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $303.79 million, indicating a 11.8% growth compared to the corresponding quarter of the prior year.

For the full year, the Zacks Consensus Estimates project earnings of $2.62 per share and a revenue of $1.21 billion, demonstrating changes of -69.43% and +16.44%, respectively, from the preceding year.

It is also important to note the recent changes to analyst estimates for Duolingo, Inc. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. At present, Duolingo, Inc. boasts a Zacks Rank of #3 (Hold).

In the context of valuation, Duolingo, Inc. is at present trading with a Forward P/E ratio of 56.65. This denotes a premium relative to the industry average Forward P/E of 15.73.

It's also important to note that DUOL currently trades at a PEG ratio of 1.22. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. As the market closed yesterday, the Technology Services industry was having an average PEG ratio of 1.22.

The Technology Services industry is part of the Business Services sector. With its current Zacks Industry Rank of 174, this industry ranks in the bottom 30% of all industries, numbering over 250.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

Published in