Fortune can be a fickle friend on Wall Street, as is the case for Duolingo (NASDAQ:DUOL) today. The mobile learning platform delivered robust first-quarter growth and hiked its financial outlook. However, concerns over slowing subscriber growth have pulled its shares nearly 20% lower today.
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DUOL’s Stellar Growth
Duolingo’s first quarter has been stellar on most metrics. The company’s revenue soared by 44.9% year-over-year to $167.55 million. Its EPS of $0.57 handily exceeded estimates by $0.30. Additionally, the company’s total bookings soared by 41% to $197.5 million and its paid subscribers ballooned by 54% to 7.4 million. DUOL had nearly 31.45 million daily active users in Q1. That is an increase of 54% over the prior year.
Overshadowed by Growth Concerns
Moreover, Duolingo posted a net income of $27 million for the quarter, compared to a net loss of $2.6 million a year ago. At the same time, Luis von Ahn, the co-founder and CEO of Duolingo, noted in the company’s Q1 earnings call that the company’s active user growth is decelerating after ten consecutive quarters of accelerating gains. Additionally, the upcoming quarter is a seasonally slow quarter for DUOL.
For Q2, DUOL anticipates that adjusted EBITDA will be between $36.8-$39.1 million on a revenue between $175-$177.5 million. For the full year, the company foresees an adjusted EBITDA of $167.1-$176.5 million on $726.5-$735.5 million in revenue. In comparison, it previously expected revenue to be between $717.5-$729.5 million for FY2024.
What Is the Price Target for DUOL?
Despite today’s price decline, Duolingo shares still remain nearly 47% higher over the past year. Overall, the Street has a Moderate Buy consensus rating on the stock, alongside an average DUOL price target of $247.88.
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