Key Takeaways
- Evercore ISI elevated Duolingo to “Outperform” status with a new $210 price target, suggesting potential gains exceeding 40%
- DA Davidson increased its price objective to $175 from $160 while maintaining a Buy recommendation, pointing to robust daily active user metrics
- Second-quarter revenue reached $298.5 million, surpassing analyst projections, while daily active users jumped 23% annually to 58.7 million
- DA Davidson’s proprietary tracking indicates Q3 DAU expansion could range from 25.6% to 27.6% compared to last year
- The company unveiled a $400 million stock buyback initiative when reporting Q2 financial results
Shares of Duolingo (DUOL) advanced 3.8% during Tuesday’s pre-market session following an upgrade from Evercore ISI and an elevated price target reaching $210.
Mark Mahaney, an analyst at Evercore, shifted his rating on the language learning platform to “Outperform” from the previous “In Line” designation. The revised target, calculated using 20 times projected 2028 EBITDA, indicates potential appreciation of over 40% from current trading levels.
The investment firm simultaneously boosted its earnings per share projections, positioning them 10% higher than Wall Street’s consensus estimates for 2027 and 25% above for 2028.
Duolingo was changing hands at $148.36 prior to the pre-market movement, with after-hours pricing registering at $158.55.
The positive call from Evercore wasn’t the sole analyst movement on Tuesday. DA Davidson elevated its price objective to $175 from the previous $160 level, continuing to endorse the stock with a Buy recommendation.
Wyatt Swanson, analyst at DA Davidson, grounded the assessment in proprietary tracking information compiled from over 170,000 current Duolingo users.
This internal data suggests Q3 daily active user expansion should settle somewhere between 25.6% and 27.6% on a year-over-year basis. August witnessed DAUs climbing 1.3% month over month, an improvement from the 0.6% recorded in the previous update.
The closing week of August, spanning August 22 through August 29, demonstrated 1.8% sequential weekly growth. This represented the most robust weekly expansion observed since the platform’s streak revival initiative in early June.
Growth materialized across both veteran user segments from 2011 through 2017 and more recent users from 2024 to 2026 during that final August week.
Impressive Q2 Performance Drives Optimism
These bullish analyst assessments arrived on the heels of Duolingo’s second-quarter earnings release, which delivered considerable ammunition for optimistic forecasts. Revenue totaled $298.5 million, exceeding consensus projections.
Daily active users expanded 23% year over year, reaching 58.7 million. Management simultaneously revealed a $400 million share repurchase program in conjunction with these quarterly results.
Revenue climbed 29% annually with gross profit margins landing at 73%, per InvestingPro data. DA Davidson’s $175 price objective represents 23.5 times and 18.5 times the firm’s 2026 and 2027 EBITDA projections, respectively.
The research firm highlighted that its DAU monitoring data has traditionally underestimated reported outcomes by 100 to 200 basis points, hinting that actual Q3 figures might exceed current expectations.
Market Environment and Positioning
Duolingo’s pre-market strength materialized against a backdrop of broader market weakness. S&P 500 futures declined approximately 0.6% while Nasdaq-100 futures dropped nearly 1%.
Trading sentiment reflected concerns about escalating U.S.-Iran tensions, climbing crude oil valuations, and evolving Federal Reserve monetary policy outlook.
Market participants were anticipating the JOLTS job openings release, with Friday’s comprehensive monthly employment report still pending.
Citizens presently maintains a Market Perform assessment on Duolingo, with shares trading at 14.8 times the firm’s 2027 EBITDA estimate of $382 million.
Duolingo independently reported daily active user growth of 27.4% year over year based on August 2026 figures, exceeding DA Davidson’s proprietary tracking projections.
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