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Duolingo, Inc. (DUOL) Stock Sinks As Market Gains: Here's Why

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Duolingo, Inc. (DUOL - Free Report) ended the recent trading session at $335.99, demonstrating a -0.01% swing from the preceding day's closing price. The stock fell short of the S&P 500, which registered a gain of 0.53% for the day. Elsewhere, the Dow saw an upswing of 0.93%, while the tech-heavy Nasdaq appreciated by 0.22%.

The company's stock has dropped by 1.28% in the past month, falling short of the Business Services sector's gain of 1.06% and the S&P 500's gain of 2.69%.

The upcoming earnings release of Duolingo, Inc. will be of great interest to investors. The company's upcoming EPS is projected at $0.50, signifying a 92.31% increase compared to the same quarter of the previous year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $204.66 million, up 35.54% from the year-ago period.

Any recent changes to analyst estimates for Duolingo, Inc. should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.11% lower within the past month. Currently, Duolingo, Inc. is carrying a Zacks Rank of #3 (Hold).

Investors should also note Duolingo, Inc.'s current valuation metrics, including its Forward P/E ratio of 110.36. This expresses a premium compared to the average Forward P/E of 24.12 of its industry.

The Technology Services industry is part of the Business Services sector. At present, this industry carries a Zacks Industry Rank of 86, placing it within the top 35% of over 250 industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow DUOL in the coming trading sessions, be sure to utilize Zacks.com.


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