Duolingo, Inc. (DUOL) Suffers a Larger Drop Than the General Market: Key Insights

In the latest trading session, Duolingo, Inc. (DUOL) closed at $94.12, marking a -1.29% move from the previous day. The stock trailed the S&P 500, which registered a daily loss of 0.4%. At the same time, the Dow added 0.11%, and the tech-heavy Nasdaq lost 0.73%.

Heading into today, shares of the company had lost 5.59% over the past month, outpacing the Business Services sector's loss of 8.04% and the S&P 500's loss of 7.34%.

The investment community will be paying close attention to the earnings performance of Duolingo, Inc. in its upcoming release. 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%. Alongside, our most recent consensus estimate is anticipating revenue of $288.6 million, indicating a 25.07% upward movement from the same quarter last year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $3.08 per share and revenue of $1.21 billion. These totals would mark changes of -64.06% and +16.53%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for Duolingo, Inc. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 23.19% lower. Duolingo, Inc. is currently sporting a Zacks Rank of #5 (Strong Sell).

Investors should also note Duolingo, Inc.'s current valuation metrics, including its Forward P/E ratio of 30.96. Its industry sports an average Forward P/E of 15.98, so one might conclude that Duolingo, Inc. is trading at a premium comparatively.

It's also important to note that DUOL currently trades at a PEG ratio of 0.66. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Technology Services stocks are, on average, holding a PEG ratio of 1.27 based on yesterday's closing prices.

The Technology Services industry is part of the Business Services sector. This industry, currently bearing a Zacks Industry Rank of 187, finds itself in the bottom 24% echelons of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

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

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

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