Duolingo Trades At Peak Valuation, Analyst Downgrades It

Duolingo Inc (NASDAQ:DUOL) stock fell after B of A Securities analyst Curtis Nagle downgraded the rating from Buy to Neutral with a price target of $375, up from $355.

The downgrade reflects less upside potential as the stock traded at peak valuation, and near-term estimate revisions may be lower than in prior quarters.

Nagle continued to see Duolingo as one of the highest-quality and most consistent growth names within the Internet and noted the potential for 40% EBITDA margins (versus 26% now) and over 20% GAAP net income margins (versus 13% now) over the long term.

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Duolingo’s ability to grow users virally (marketing is only 11% of sales versus 15% for sub-peers), nearly double subscribers as a …

Full story available on Benzinga.com