Duolingo, Inc. (DUOL) Laps the Stock Market: Here's Why

Duolingo, Inc. (DUOL) ended the recent trading session at $99.38, demonstrating a +2.94% change from the preceding day's closing price. The stock's performance was ahead of the S&P 500's daily gain of 0.44%. Meanwhile, the Dow experienced a rise of 0.36%, and the technology-dominated Nasdaq saw an increase of 0.54%.

The company's shares have seen a decrease of 5.28% over the last month, surpassing the Business Services sector's loss of 5.96% and falling behind the S&P 500's loss of 3.31%.

The upcoming earnings release of Duolingo, Inc. will be of great interest to investors. On that day, Duolingo, Inc. is projected to report earnings of $0.79 per share, which would represent year-over-year growth of 9.72%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $288.6 million, up 25.07% from the year-ago period.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $3.08 per share and a revenue of $1.21 billion, signifying shifts of -64.06% and +16.53%, respectively, from the last year.

Investors should also note any recent changes to analyst estimates for Duolingo, Inc. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Duolingo, Inc. presently features a Zacks Rank of #5 (Strong Sell).

In terms of valuation, Duolingo, Inc. is presently being traded at a Forward P/E ratio of 31.34. For comparison, its industry has an average Forward P/E of 16.11, which means Duolingo, Inc. is trading at a premium to the group.

Also, we should mention that DUOL has a PEG ratio of 0.67. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Technology Services industry had an average PEG ratio of 1.28 as trading concluded yesterday.

The Technology Services industry is part of the Business Services sector. At present, this industry carries a Zacks Industry Rank of 192, placing it within the bottom 22% of over 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.

You can find more information on all of these metrics, and much more, on Zacks.com.

Radical New Technology Could Hand Investors Huge Gains

Quantum Computing is the next technological revolution, and it could be even more advanced than AI.

While some believed the technology was years away, it is already present and moving fast. Large hyperscalers, such as Microsoft, Google, Amazon, Oracle, and even Meta and Tesla, are scrambling to integrate quantum computing into their infrastructure.

Senior Stock Strategist Kevin Cook reveals 7 carefully selected stocks poised to dominate the quantum computing landscape in his report, Beyond AI: The Quantum Leap in Computing Power.

Kevin was among the early experts who recognized NVIDIA's enormous potential back in 2016. Now, he has keyed in on what could be "the next big thing" in quantum computing supremacy. Today, you have a rare chance to position your portfolio at the forefront of this opportunity.

See Top Quantum Stocks Now >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Duolingo, Inc. (DUOL): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research