Key Takeaways
- Evercore ISI elevated Duolingo to “Outperform” status with a $210 price objective, suggesting potential gains exceeding 40%
- DA Davidson increased its price objective to $175 from $160 while maintaining a Buy recommendation, pointing to robust user engagement 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 data indicates third-quarter DAU expansion is trending between 25.6% and 27.6% compared to the prior year
- The language-learning platform unveiled a $400 million buyback initiative concurrent with its Q2 financial disclosure
Shares of Duolingo (DUOL) advanced 3.8% during pre-market hours on Tuesday following an upgrade from Evercore ISI, which simultaneously boosted its price objective to $210.
Evercore analyst Mark Mahaney elevated the stock rating to “Outperform” from “In Line.” The revised target represents approximately 20 times projected 2028 EBITDA and signals potential appreciation of over 40% from current trading levels.
The investment firm simultaneously increased its earnings per share projections, which now stand 10% higher than the Street consensus for 2027 and 25% above expectations for 2028.
Duolingo closed at $148.36 prior to the pre-market session, with after-hours pricing reflected at $158.55.
The Evercore revision wasn’t the sole analyst movement on Tuesday. DA Davidson elevated its price objective to $175 from $160 while reaffirming its Buy stance on the shares.
DA Davidson analyst Wyatt Swanson supported the decision with proprietary monitoring data encompassing over 170,000 current Duolingo users.
This dataset suggests Q3 DAU expansion will fall within a 25.6% to 27.6% year-over-year range. August DAUs increased 1.3% from the previous month, an improvement from the 0.6% gain recorded in the earlier assessment.
The concluding week of August, spanning August 22 through August 29, demonstrated 1.8% sequential growth. This represented the most robust weekly expansion since the platform’s streak revival initiative in early June.
Both legacy user groups from 2011 through 2017 and more recent cohorts from 2024 through 2026 exhibited growth throughout that final week.
Impressive Q2 Performance Provides Foundation
These analyst adjustments followed Duolingo’s second-quarter financial report, which provided substantial material for analysis. Revenue totaled $298.5 million, exceeding consensus projections.
Daily active users climbed 23% year over year to reach 58.7 million. The company simultaneously announced a $400 million share buyback program with those financial results.
Revenue expanded 29% annually with gross profit margins reaching 73%, per InvestingPro data. DA Davidson’s $175 objective represents 23.5 times and 18.5 times the firm’s 2026 and 2027 EBITDA projections respectively.
The investment firm observed that its DAU monitoring data has typically underestimated official results by 100 to 200 basis points, indicating actual Q3 figures may exceed expectations.
Wider Market Dynamics
Duolingo’s pre-market strength emerged against a challenging broader market backdrop. S&P 500 futures declined approximately 0.6% while Nasdaq-100 futures dropped nearly 1%.
Market participants monitored escalating U.S.-Iran tensions, climbing crude oil valuations, and evolving Federal Reserve policy projections.
Traders also anticipated the JOLTS job openings report, with Friday’s monthly employment statistics remaining on the calendar.
Citizens maintains a Market Perform assessment on Duolingo, with shares trading at 14.8 times estimated 2027 EBITDA of $382 million.
Duolingo independently reported daily active user growth of 27.4% year over year based on August 2026 figures, which exceeded DA Davidson’s tracking projections.
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