Morgan Stanley analyst Nathan Feather has maintained their bullish stance on DUOL stock, giving a Buy rating on October 28.
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Nathan Feather has given his Buy rating due to a combination of factors that suggest a positive outlook for Duolingo’s stock. The company is expected to surpass buy-side expectations for daily active users (DAUs) in the third quarter, driven largely by significant growth in China and a consistent history of exceeding guidance. Despite potential risks of a weaker fourth-quarter user guide, these concerns seem to be already reflected in the current stock price, presenting a favorable risk-reward scenario.
Additionally, there are signs of stabilization in the U.S. market, with improvements in social virality, monthly active user growth, app ratings, and direct payment adoption. While alternative data indicates a deceleration in downloads and DAU growth, the company’s strong guidance track record suggests that third-quarter user growth will likely exceed expectations. This potential upside in user growth, combined with the current stock valuation, supports the Buy recommendation.
In another report released on October 28, Scotiabank also maintained a Buy rating on the stock with a $600.00 price target.
Based on the recent corporate insider activity of 106 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of DUOL in relation to earlier this year.