DA Davidson reiterates buy on Duolingo stock, $175 target on user data

DA Davidson maintained its positive outlook on Duolingo Inc. (NASDAQ:DUOL), reaffirming a Buy rating and setting a price target of $175 per share. The firm's analysis is based on recent user activity data, tracking over 170,000 existing Duolingo users. September's daily active user trends were found to be more volatile than the first two months of Q3.

However, the last week of September witnessed the most significant week-over-week growth observed throughout the quarter. With the stock currently trading at $134.30, the $175 target implies approximately 30% upside potential. This valuation suggests a price-to-EBITDA multiple of 23.5 times the company's 2026 EBITDA estimate and 18.5 times the 2027 projection.

Evercore ISI has also upgraded Duolingo's stock rating to Outperform, raising its price target to $210, driven by anticipated product enhancements and revised earnings estimates. Duolingo's impressive 73% gross profit margin contributes to the premium valuation. The company's recent disclosure of a 27.4% daily active user growth rate during an investor meeting, as reported in a Securities and Exchange Commission filing, aligns with DA Davidson's expectations of a 26.0% to 28.0% year-over-year growth.