There has been an increasing interest in travel of late, as we have seen with the soaring sales at Boeing (BA). But travel often brings with it the need to speak other languages, and that seems to be prompting an interest in Duolingo (DUOL), the language instruction tool. Duolingo stock is up nearly 3% in Wednesday afternoon’s trading after institutional investors revealed that they bought its shares.
The new reports note that M&G Plc hiked its investment in Duolingo by an additional 12.4% in the second quarter, as revealed by Securities and Exchange Commission (SEC) filings. M&G Plc now owns 37,196 shares, picking up an extra 4,098 shares in the second quarter. This brings M&G Plc’s overall level of ownership to 0.09% of the company, valued at a little under $7.78 million as of the filing.
It was not alone in this, either; several other hedge funds, including Norges Bank, AGF Management, and others, bought in on the stock. Yet, despite the rising interest from hedge funds, insiders carried out quite a bit of selling, based on TipRanks insider selling data. Much of the selling was done on an automatic basis, though, which does not carry a lot of weight in terms of gauging insiders’ outlook of the company.
Not Buying Without Reason
That growing tide of institutional buying interest is not built out of raw speculation. Recent reports point to a growing use of generative artificial intelligence (AI) at Duolingo, as well as a positive user experience and strong marketing. Add a solid valuation to the picture and it starts to look, to some at least, like an attractive buy.
Is Duolingo a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on DUOL stock based on eight Buys and four Holds assigned in the past three months, as indicated by the graphic below. After a 50.72% rally in its share price over the past year, the average DUOL price target of $238.56 per share implies 21.91% upside potential.
