Duolingo, Inc. (DUOL) Advances While Market Declines: Some Information for Investors

Core Viewpoint - Duolingo, Inc. is experiencing significant fluctuations in stock performance, with a notable loss over the past month, while upcoming earnings are projected to show substantial growth in both EPS and revenue [1][2][3]. Company Performance - Duolingo's stock closed at $120.70, reflecting a daily increase of 1.51%, outperforming the S&P 500's loss of 0.33% [1]. - Over the past month, Duolingo's shares have decreased by 26.48%, significantly underperforming the Business Services sector's loss of 7.51% and the S&P 500's stable performance [1]. Earnings Projections - The company is expected to announce earnings on February 26, 2026, with an EPS forecast of $0.79, indicating a 154.84% increase year-over-year [2]. - Revenue for the upcoming quarter is projected at $276.79 million, representing a 32.09% increase compared to the same quarter last year [2]. Full Year Estimates - For the full year, earnings are projected at $8.38 per share and revenue at $1.03 billion, reflecting increases of 345.74% and 37.9% respectively from the previous year [3]. - Recent changes in analyst estimates suggest a positive outlook for the company's business and profitability [3]. Analyst Ratings - Duolingo currently holds a Zacks Rank of 4 (Sell), with a recent consensus EPS projection declining by 1.55% over the past 30 days [5]. - The Zacks Rank system has a history of outperforming, with stocks rated 1 yielding an average annual return of +25% since 1988 [5]. Valuation Metrics - Duolingo has a Forward P/E ratio of 29.65, indicating a premium compared to its industry's Forward P/E of 16.38 [6]. - The company has a PEG ratio of 0.64, which is below the average PEG ratio of 1.59 for the Technology Services industry [7]. Industry Context - The Technology Services industry, part of the Business Services sector, has a Zacks Industry Rank of 157, placing it in the bottom 36% of over 250 industries [8]. - The top 50% rated industries tend to outperform the bottom half by a factor of 2 to 1, indicating potential challenges for Duolingo within its industry context [8].