Goldman Sachs Upgrades Duolingo to Neutral, Raises Price Target

Overview

Goldman Sachs recently upgraded Duolingo's stock from "Sell" to "Neutral," indicating a shift in the firm's outlook on the language-learning platform.

The upgrade comes after Duolingo reported mixed Q2 2024 earnings, with revenue meeting expectations but earnings per share falling short.

Key Points

• Goldman Sachs upgraded Duolingo to Neutral from Sell.
• The firm maintained its price target of $198.
• Goldman Sachs views the risk-reward balance as more favorable.

Background

Goldman Sachs had previously rated Duolingo as "Sell" with a price target of $106.00.

The firm's analysts had been skeptical about Duolingo's ability to maintain growth in its core language-learning business, as well as its ability to expand into new areas such as English proficiency certification.

Analyst Commentary

In a research note, Goldman Sachs analyst Lisa Ellis said the upgrade reflects the firm's belief that Duolingo's risk-reward profile has improved.

Ellis highlighted Duolingo's strong brand, global reach, and potential for growth in new markets.

Implications

The upgrade from Goldman Sachs is likely to be welcomed by Duolingo investors, as it signals increased confidence in the company's prospects.

The stock price has already reacted positively to the news, rising by over 5% in pre-market trading.

Conclusion

Goldman Sachs' upgrade of Duolingo to Neutral is a positive development for the company and its investors.

The firm's analysts believe that Duolingo has a favorable risk-reward profile and the potential for continued growth.