Duolingo Inc. (NASDAQ:DUOL) shares are trading higher Monday after receiving fresh support from Wall Street analysts.
What To Know: Citigroup initiated coverage of the stock with a Buy rating and a $400 price target, while KeyBanc Capital Markets upgraded the language-learning platform from Sector Weight to Overweight with a higher $460 price target.
The bullish calls come after a period of investor concern that Duolingo's growth might be slowing, particularly as fears around AI disruption and user engagement weighed on sentiment earlier this year. In a research note, KeyBanc analyst Justin Patterson said the company's new product features and marketing approach are likely to offset those worries. He pointed specifically to the rollout of the "Energy" system, which replaces the penalty-based Hearts model with rewards for correct answers.
According to Patterson, the update has already led to measurable improvements in daily active users, time spent learning, and subscriber conversion rates. He noted that it is unusual for a single feature to improve all three metrics simultaneously.
The analyst also pointed out that Duolingo is regaining momentum in its viral marketing strategy. He said social sentiment has stabilized and the company is again leaning into more experimental and edgy content, which could boost user acquisition. He added that management remains intensely focused on daily active users and long-term engagement, an emphasis he believes will help the company recover from the AI backlash and sustain its growth trajectory.
The upgrades follow a strong year for the stock, which has outpaced broader market benchmarks despite periods of underperformance. Duolingo's shares are now trading near $368, extending their rally on renewed optimism that product innovation and marketing will drive continued user growth and financial performance.
DUOL Price Action: Duolingo shares were up 9.61% at $358.36 at the time of writing, according to Benzinga Pro.
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