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Duolingo Stock Jumps on Evercore ISI Upgrade and $210 Price Target
Shares of Duolingo (NASDAQ: DUOL) rose sharply in pre-market trading after a high-profile analyst upgrade from Evercore ISI, which significantly raised its price target and earnings estimates for the language-learning platform.
Evercore ISI Upgrade Drives Rally
Evercore ISI analyst Mark Mahaney upgraded Duolingo to Outperform from In Line, according to a note released early this morning. The firm simultaneously doubled its price target on the stock to $210, implying more than 40% potential upside from recent trading levels.
The new valuation is based on a framework of 20 times the company's projected 2028 EBITDA. Citing increased confidence, Evercore also lifted its forward earnings estimates, with its 2027 and 2028 earnings per share (EPS) projections now standing 10% and 25% above Wall Street consensus, respectively.
Growing Wall Street Optimism
The upgrade is the latest in a series of constructive analyst actions for Duolingo. According to Investing.com, the move follows a string of positive updates in August, including a Buy upgrade from DA Davidson and price target increases from both JPMorgan and Wedbush.
AdThis growing optimism is underpinned by the company's strong second-quarter financial report and user metrics. Key highlights included:
- Revenue of $298.5 million, which beat consensus estimates.
- Daily active users growing 23% year-over-year to 58.7 million.
- The announcement of a $400 million share repurchase program.
Outperforming in a Weak Market
Duolingo's pre-market gain of 3.8% is particularly notable as it comes amid a challenging macroeconomic environment. Broader U.S. equity futures were trading in negative territory as investors weighed geopolitical tensions, elevated oil prices, and the potential for renewed Federal Reserve interest rate hikes.
The stock's ability to rally despite these headwinds demonstrates how a strong, company-specific catalyst and an improving fundamental narrative can override broad market pressures.
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