Duolingo is set to announce its earnings this Wednesday, with analysts optimistic about the company’s growth trajectory. Last quarter, Duolingo exceeded revenue expectations by 3.4%, reporting $230.7 million, which marks a remarkable 37.7% increase year-over-year. The app’s user base grew to 130.2 million, reflecting a 33.4% jump compared to the previous year.
For this upcoming earnings report, analysts anticipate a revenue increase of 35% year-over-year, projecting revenues of $240.8 million. This expected growth is a slight deceleration compared to the 40.6% increase seen in the same quarter last year. Analysts expect adjusted earnings to be around $1.29 per share.
Recent trends among Duolingo’s peers in the consumer subscription space provide some context for expectations. Coursera recently reported a 9.8% year-on-year revenue growth and Roku achieved a 14.8% increase. However, investor sentiments remain mixed across the sector, as Coursera’s stock surged following its results while Roku’s shares dropped.
Despite a challenging last month, where Duolingo’s stock has declined by 10.7%, the overall consumer subscription segment has seen average gains of 1.5%. Currently, analysts maintain an average price target for Duolingo of $492.09, significantly higher than its current share price of $354.01.
As investors look ahead, the strong fundamentals and user growth for Duolingo hint at promising potential. The company continues to hold a strong position in the language-learning market, which may bode well for its future performance.
Comments: The growth in users and revenue, along with the optimistic analyst revisions, provide a hopeful outlook for the company’s upcoming earnings, suggesting that despite the recent stock decline, there is potential for recovery and growth.