1 Wall Street Analyst Thinks Duolingo Stock Is Going to $222. Is It a Buy at Around $195?
Duolingo (NASDAQ: DUOL) investors got some good news on Tuesday, when for the first time in nearly six months, an analyst began covering the language learning stock with a better rating than just "neutral."
On Tuesday, Seaport Global Securities initiated coverage of Duolingo with a "buy" rating and a $222 price target, as StreetInsider.com reports. Admittedly, Seaport set a high bar for Duolingo, noting that it's valuing the stock at a whopping 12 times the revenues Duolingo might collect in 2025. But the analyst thinks this price is justified, calling Duolingo the clear leader in online language learning, and predicting the stock will increase sales by a compound annual growth rate (CAGR) of 20% or better over the long term.
Is Seaport right? On the one hand, the analyst's sales prediction looks reasonable. S&P Global Market Intelligence data show Duolingo averaging 46% annual sales growth over the last two years -- more than twice the rate of growth that Seaport forecasts. And gross profit margins are expanding even faster, averaging 47% growth.
Source Fool.com
