Duolingo Shares Dive After Q1 Results: What's Going On?

Duolingo, Inc. DUOL shares traded lower Thursday afternoon after the company reported first-quarter financial results.

What To Know: Duolingo reported EPS of 57 cents, outperforming estimates of 27 cents by 111.11%, while quarterly sales of $167.6 million exceeded expectations of $165.677 million by 1.16%. Bolstered by a 41% increase in total bookings and a surge in paid subscribers to 7.4 million, Duolingo showcased its strong growth trajectory.

CEO Luis von Ahn highlighted the company’s record profitability and user engagement, driven by a 54% year-over-year increase in daily active users (DAUs). Despite the positive results, Duolingo shares faced a 18.07% decline Thursday afternoon, settling at $200.50 at the time of writing, according to Benzinga Pro.

Looking Ahead: Duolingo forecasted second-quarter revenue of $175 million to $177.5 million, versus analyst estimates of $176.9 million. However, the company raised its full-year revenue guidance to a range of $726.5 million to $735.5 million versus estimates of $728.23 million, indicating confidence in its continued growth trajectory.

Analysts remain divided on Duolingo’s prospects. Following Duolingos’ quarterly results, Needham maintained a Buy rating and raised the price target to $267 from $241, while Barclays maintained an Equal-Weight rating and lowered the price target to $230 from $243.

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