Duolingo stock price jumped by 5% on Monday as American equities bounced back and as investors reacted to a bullish research note by Bank of America analysts. DUOL jumped to $185, a few points above this year’s low of $174. Still, it remains 66% below its all-time high after having a disastrous year in 2025.
Wall Street analysts are bullish on the Duolingo stock
Duolingo share price crashed last year, a move that erased billions of dollar in value as its market capitalization tumbled from over $24 billion to the current $8.54 billion.
Some Wall Street analysts believe that the company has now become a bargain and that it will rebound this year. The most recent note came from Bank of America, which booted the rating from neutral to buy.
In the note, the analyst argued that the company had more room to grow, especially if it was viewed a mobile gaming company. Also, the analyst noted that the company was adding more subject ike chess, math, and music, which will broaden its apeal among users.
Most importantly, Bank of America analysts believe that the company has a large total addressable market (TAM). It based this view on the fact that over 1 billion people from around the world were considering learning additional languages over time.
BoFA joins other analysts who believe that the company has more upside going forward. Data compiled by Barchart shows that the consensus estimate for the Duolingo stock price is $314, much higher than th e current $184.
Jefferies’ John Colantuoni has a target of $220, while Evercore’s Mark Mahaney has a target of $330. Other bullish analysts are from Scotiabank, Morgan Stanley, Raymond James, and Citi.
Duolingo’s business is growing at a lower pace than expected
The ongoing Duolingo stock crash accelerated after the company published its financial results that were weaker than expected. Its numbers showed that it had over 11.5 million paid subscribers, up by 34% from the same period in the previous year.
Duolingo’s revenue rose by 41% to $271 million, while its net income was up by over 100% to $292 million. This profit growth was primarily because the company released the valuation allowance recorded against its federal and state deferred tax assets.
While Duolingo’s numbers were strong, they missed analysts’ estimates. Its guidance was also weaker than expected. Yahoo Finance data shows that the company’s growth will slow. The average estimate is that its annual revenue growth for last year was 37% to $1.03 billion. This growth will then slow to 22.42% to $1.26 billion.
The daily chart shows that the Duolingo stock price has been in a free fall in the past few months. It has crashed from a high of $544 to the current $185, which explains why it has remained below all moving averages.
On the positive side, the stock has formed an island reversal pattern, which is a rare reversal pattern. This pattern happens after a stock makes a big gap, which is then followed by a consolidation.
The stock has also formed a double-bottom pattern at $174.10 and a neckline at $213. Therefore, there is a likelihood that it will rebound, and possibly hit the neckline. A move above that level will raise the odds of the stock jumping to $250.
The post Duolingo stock forms island reversal as key analyst changes tune appeared first on Invezz
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