We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The Zacks Consensus Estimate for DUOL’s bottom line in the to-be-reported quarter stands at 33 cents per share, indicating a 312.5% year-over-year improvement. The consensus estimate for revenues is pegged at $176.9 million, indicating a 39.5% increase from the year-ago reported figure. One estimate for the to-be-reported quarter’s earnings moved north over the past 30 days versus no southward revisions.
Image Source: Zacks Investment Research
DUOL’s earnings surprise history has been impressive. Earnings surpassed the Zacks Consensus Estimate in the four trailing quarters, the average surprise being 115.2%.
Image Source: Zacks Investment Research
Q2 Earnings Beat Seems Unlikely
Our proven model doesn’t conclusively predict an earnings beat for DUOL this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
We expect that year-over-year improvement in the company’s top line in the to-be-reported quarter will be driven by an increase in the Subscription, Advertising, and Duolingo English Test revenues.
The consensus estimate for Subscription revenues is pegged at $140.1 million, indicating 47.2% year-over-year growth. The consensus mark for Advertisingrevenuesis pegged at $13.5 million, indicating 3.1% year-over-year growth. The consensus mark for Duolingo English Test revenues stands at $12.3 million, suggesting 25.6% year-over-year growth.
The top line is likely to have reaped the benefits of the increase in daily and monthly average users and the surge in the number of subscribers. Daily and monthly active users are expected to increase 56.8% and 22.7% year over year, respectively. Paid subscribers are anticipated to increase 46.7% year over year.
DUOL is Dipping
The stock has declined 30% year to date, a considerable drop compared to the 4.9% rally of the industry and the 9% rise in the Zacks S&P 500 composite.
This drop mirrors the performance of its closest competitors, Coursera (COUR - Free Report) and Chegg (CHGG - Free Report) , which have seen declines of 57.9% and 74.2%, respectively, over the same period.
Looking beyond the year-to-date performance, DUOL’s stock has surged 13.3% over the past year, indicating that the current downturn is part of a correction phase.
Year-to-Date Price Performance
Image Source: Zacks Investment Research
Product Excellence, Subscriber Conversion Key to Investment
Duolingo's success relies on product excellence and innovation in language learning. The platform offers interactive lessons in multiple languages, using gamified techniques to engage users through exercises, quizzes and challenges. Its user-friendly interface makes learning enjoyable and accessible globally. The company's strategy focuses on effective teaching, expanding its user base, and converting users into subscribers.
In 2024, Duolingo optimized its subscription offerings, such as the family plan and Duolingo Max. This emphasis on excellence drives growth through word-of-mouth. In Q1 2024, Duolingo saw a 45% revenue increase, with net income rising to $27 million. The company has raised its bookings growth guidance to 38% and adjusted EBITDA margin guidance to 23.5%.
Add DUOL This Earnings Season
Duolingo’s product excellence, monetization efforts, and expanding user and subscriber base contribute to its potential for sustained success. The company’s solid financial health, coupled with strong top and bottom-line growth prospects, make it an attractive investment opportunity.
The significant correction in the year-to-date period, without a loss of fundamental strength, presents a compelling case for buying Duolingo stock at its current levels.
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report predicting the 7 stocks that will soar highest in the coming month.
Image: Bigstock
Pre-Q2 Earnings: Is Duolingo (DUOL) a Portfolio Must-Have?
Duolingo, Inc. (DUOL - Free Report) is scheduled to report its second-quarter 2024 results on Aug 7, after the bell.
The Zacks Consensus Estimate for DUOL’s bottom line in the to-be-reported quarter stands at 33 cents per share, indicating a 312.5% year-over-year improvement. The consensus estimate for revenues is pegged at $176.9 million, indicating a 39.5% increase from the year-ago reported figure. One estimate for the to-be-reported quarter’s earnings moved north over the past 30 days versus no southward revisions.
DUOL’s earnings surprise history has been impressive. Earnings surpassed the Zacks Consensus Estimate in the four trailing quarters, the average surprise being 115.2%.
Q2 Earnings Beat Seems Unlikely
Our proven model doesn’t conclusively predict an earnings beat for DUOL this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
DUOL has an Earnings ESP of 0.00% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Strong Active User and Subscriber Growth Expected
We expect that year-over-year improvement in the company’s top line in the to-be-reported quarter will be driven by an increase in the Subscription, Advertising, and Duolingo English Test revenues.
The consensus estimate for Subscription revenues is pegged at $140.1 million, indicating 47.2% year-over-year growth. The consensus mark for Advertisingrevenuesis pegged at $13.5 million, indicating 3.1% year-over-year growth. The consensus mark for Duolingo English Test revenues stands at $12.3 million, suggesting 25.6% year-over-year growth.
The top line is likely to have reaped the benefits of the increase in daily and monthly average users and the surge in the number of subscribers. Daily and monthly active users are expected to increase 56.8% and 22.7% year over year, respectively. Paid subscribers are anticipated to increase 46.7% year over year.
DUOL is Dipping
The stock has declined 30% year to date, a considerable drop compared to the 4.9% rally of the industry and the 9% rise in the Zacks S&P 500 composite.
This drop mirrors the performance of its closest competitors, Coursera (COUR - Free Report) and Chegg (CHGG - Free Report) , which have seen declines of 57.9% and 74.2%, respectively, over the same period.
Looking beyond the year-to-date performance, DUOL’s stock has surged 13.3% over the past year, indicating that the current downturn is part of a correction phase.
Year-to-Date Price Performance
Product Excellence, Subscriber Conversion Key to Investment
Duolingo's success relies on product excellence and innovation in language learning. The platform offers interactive lessons in multiple languages, using gamified techniques to engage users through exercises, quizzes and challenges. Its user-friendly interface makes learning enjoyable and accessible globally. The company's strategy focuses on effective teaching, expanding its user base, and converting users into subscribers.
In 2024, Duolingo optimized its subscription offerings, such as the family plan and Duolingo Max. This emphasis on excellence drives growth through word-of-mouth. In Q1 2024, Duolingo saw a 45% revenue increase, with net income rising to $27 million. The company has raised its bookings growth guidance to 38% and adjusted EBITDA margin guidance to 23.5%.
Add DUOL This Earnings Season
Duolingo’s product excellence, monetization efforts, and expanding user and subscriber base contribute to its potential for sustained success. The company’s solid financial health, coupled with strong top and bottom-line growth prospects, make it an attractive investment opportunity.
The significant correction in the year-to-date period, without a loss of fundamental strength, presents a compelling case for buying Duolingo stock at its current levels.