Options Movement At Duolingo: Severin Hacker Exercises Worth $4.02M

A substantial insider activity was disclosed on June 24, as Hacker, Chief Tech Officer at Duolingo DUOL, reported the exercise of a large sell of company stock options.

What Happened: In an insider options sale disclosed in a Form 4 filing on Tuesday with the U.S. Securities and Exchange Commission, Hacker, Chief Tech Officer at Duolingo, exercised stock options for 10,000 shares of DUOL. The transaction value amounted to $4,021,050.

Duolingo shares are currently trading down by 1.86%, with a current price of $440.19 as of Tuesday morning. This brings the total value of Hacker's 10,000 shares to $4,021,050.

About Duolingo

Duolingo Inc is a technology company that develops a mobile learning platform to learn languages and is the top-grossing app in the Education category on both Google Play and the Apple App Store. Its products are powered by sophisticated data analytics and artificial intelligence and delivered with class art, animation, and design to make it easier for learners to stay motivated master new material, and achieve their learning goals. Its solutions include the Duolingo Language Learning App, Super Duolingo, Duolingo English Test: AI-Driven Language Assessment, Duolingo For Schools, Duolingo ABC, and Duolingo Math. It has four predominant sources of revenue; time-based subscriptions, in-app advertising placement by third parties, and the Duolingo English Test, and In-App Purchases.

Duolingo's Financial Performance

Revenue Growth: Duolingo's remarkable performance in 3 months is evident. As of 31 March, 2025, the company achieved an impressive revenue growth rate of 37.71%. This signifies a substantial increase in the company's top-line earnings. In comparison to its industry peers, the company stands out with a growth rate higher than the average among peers in the Consumer Discretionary sector.

Profitability Metrics: Unlocking Value

• Gross Margin: The company sets a benchmark with a high gross margin of 71.12%, reflecting superior cost management and profitability compared to its peers.

• Earnings per Share (EPS): Duolingo's EPS is below the industry average. The company faced challenges with a current EPS of 0.78. This suggests a potential decline in earnings.

Debt Management: The company maintains a balanced debt approach with a debt-to-equity ratio below industry norms, standing at 0.06.

Valuation Metrics: A Closer Look

• Price to Earnings (P/E) Ratio: With a higher-than-average P/E ratio of 220.96, Duolingo's stock is perceived as being overvalued in the market.

• Price to Sales (P/S) Ratio: A higher-than-average P/S ratio of 26.2 suggests overvaluation in the eyes of investors, considering sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): At 236.77, the company's EV/EBITDA ratio outperforms industry norms, reflecting positive market perception. This positioning indicates optimistic expectations for the company's future performance.

Market Capitalization Analysis: With an elevated market capitalization, the company stands out above industry averages, showcasing substantial size and market acknowledgment.

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Why Insider Transactions Are Important

Considering insider transactions is valuable, but it's crucial to evaluate them in conjunction with other investment factors.

In the realm of legality, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities under Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and major hedge funds. These insiders are required to disclose their transactions through a Form 4 filing, to be submitted within two business days of the transaction.

Notably, when a company insider makes a new purchase, it is considered an indicator of their positive expectations for the stock.

Conversely, insider sells may not necessarily signal a bearish stance on the stock and can be motivated by various factors.

Transaction Codes Worth Your Attention

Taking a closer look at transactions, investors often prioritize those unfolding in the open market, meticulously cataloged in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C denotes the conversion of an option, and transaction code A signifies a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of Duolingo's Insider Trades.

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This article was generated by Benzinga's automated content engine and reviewed by an editor.