Duolingo, Inc. (NASDAQ:DUOL) Sees Large Growth in Short Interest

Duolingo, Inc. (NASDAQ:DUOL) was the target of a significant increase in short interest in February. As of February 13th, there was short interest totaling 8,729,424 shares, an increase of 26.5% from the January 29th total of 6,902,698 shares. Approximately 23.1% of the shares of the company are sold short. Based on an average daily trading volume, of 3,146,213 shares, the days-to-cover ratio is currently 2.8 days. Based on an average daily trading volume, of 3,146,213 shares, the days-to-cover ratio is currently 2.8 days. Approximately 23.1% of the shares of the company are sold short.

Duolingo Trading Down 3.1%

NASDAQ:DUOL traded down $3.18 during mid-day trading on Wednesday, hitting $98.43. 1,660,106 shares of the stock traded hands, compared to its average volume of 2,981,755. The company has a quick ratio of 2.82, a current ratio of 2.61 and a debt-to-equity ratio of 0.07. Duolingo has a 52 week low of $91.99 and a 52 week high of $544.93. The stock has a market capitalization of $4.55 billion, a price-to-earnings ratio of 11.55, a PEG ratio of 0.66 and a beta of 0.90. The firm’s 50 day moving average is $141.24 and its two-hundred day moving average is $219.90.

Duolingo (NASDAQ:DUOL) last announced its earnings results on Thursday, February 26th. The company reported $0.91 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.79 by $0.12. Duolingo had a return on equity of 14.88% and a net margin of 39.91%.The business had revenue of $282.87 million during the quarter, compared to analyst estimates of $275.95 million. The business’s revenue for the quarter was up 35.0% compared to the same quarter last year. On average, equities research analysts predict that Duolingo will post 2.03 earnings per share for the current year.

Insider Activity

In other news, insider Robert Meese sold 1,000 shares of the stock in a transaction on Tuesday, February 17th. The shares were sold at an average price of $110.06, for a total value of $110,060.00. Following the completion of the sale, the insider directly owned 122,636 shares of the company’s stock, valued at $13,497,318.16. This represents a 0.81% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, insider Natalie Glance sold 3,545 shares of Duolingo stock in a transaction on Wednesday, February 18th. The shares were sold at an average price of $113.51, for a total transaction of $402,392.95. Following the transaction, the insider owned 115,380 shares in the company, valued at approximately $13,096,783.80. This trade represents a 2.98% decrease in their position. The SEC filing for this sale provides additional information. Over the last 90 days, insiders sold 14,939 shares of company stock valued at $1,676,291. 18.30% of the stock is owned by insiders.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently added to or reduced their stakes in the business. Citigroup Inc. increased its position in shares of Duolingo by 31.8% in the third quarter. Citigroup Inc. now owns 259,666 shares of the company’s stock valued at $83,571,000 after buying an additional 62,614 shares in the last quarter. Bryce Point Capital LLC purchased a new position in shares of Duolingo in the second quarter worth about $946,000. Vanguard Group Inc. lifted its stake in Duolingo by 3.3% in the 2nd quarter. Vanguard Group Inc. now owns 3,647,951 shares of the company’s stock worth $1,495,733,000 after purchasing an additional 116,135 shares in the last quarter. Intech Investment Management LLC lifted its position in Duolingo by 967.3% during the third quarter. Intech Investment Management LLC now owns 48,926 shares of the company’s stock worth $15,746,000 after buying an additional 44,342 shares in the last quarter. Finally, Los Angeles Capital Management LLC acquired a new position in shares of Duolingo during the 2nd quarter valued at about $14,377,000. 91.59% of the stock is currently owned by institutional investors.

Key Headlines Impacting Duolingo

Here are the key news stories impacting Duolingo this week:

• Positive Sentiment: Board/management action: Duolingo announced a US$400 million buyback and is emphasizing AI and user‑growth initiatives, which can support the share price and signal confidence in cash generation. Duolingo Backs User Growth And AI With US$400m Buyback Plan
• Neutral Sentiment: Strategy/longer‑term thesis: Analysis argues FY2026 will be a transition year with management prioritizing free‑user engagement and DAU growth toward a 100M DAU 2028 target; this may pressure near‑term earnings but could enable a rebound in FY2027. Duolingo: FY2026 Will Be A Year Of Transition, Doubling Daily Active Users By 2028
• Neutral Sentiment: Market data noise: Multiple short‑interest notices in early March show anomalous/zero values and inconsistent reporting — they don’t provide clear evidence of a sustained short squeeze or ramp in bearish positioning. (Reported averages imply negligible days to cover.)
• Negative Sentiment: Analyst downgrade: Zacks Research cut Duolingo from “hold” to “strong sell,” which can accelerate outflows from momentum or quant strategies and pressure price sentiment. Zacks.com
• Negative Sentiment: Litigation risk: Two law firms (Pomerantz and Faruqi & Faruqi) announced investigations/claims on behalf of Duolingo investors, raising the prospect of shareholder suits that can be a reputational and financial overhang. Pomerantz investigation Faruqi & Faruqi reminder
• Negative Sentiment: Negative press and valuation concerns: Multiple analyses and media pieces argue the stock’s sharp decline still doesn’t make it cheap given slowing growth and a strategy that sacrifices near‑term monetization; that view weighs on investor confidence. Duolingo: The 80% Drop Doesn’t Make It Cheap Inc.com: Duolingo Stock Is Falling Off a Cliff
• Negative Sentiment: Competitive threat: Reports that Google launched a new language‑learning tool increase competitive risk in Duolingo’s core market, which could pressure user growth and monetization. Goodbye Duolingo: Google tool

Analysts Set New Price Targets

Several research firms recently weighed in on DUOL. Citizens Jmp cut shares of Duolingo from a “market outperform” rating to a “hold” rating in a research note on Thursday, November 6th. UBS Group set a $245.00 price objective on Duolingo in a research report on Monday, January 5th. BMO Capital Markets raised Duolingo to a “buy” rating in a report on Monday, January 12th. Morgan Stanley reissued an “equal weight” rating and set a $100.00 price target (down from $245.00) on shares of Duolingo in a research note on Friday, February 27th. Finally, Truist Financial cut Duolingo from a “buy” rating to a “hold” rating and set a $100.00 price target for the company. in a report on Friday, February 27th. Five investment analysts have rated the stock with a Buy rating, sixteen have issued a Hold rating and two have issued a Sell rating to the company’s stock. According to MarketBeat.com, Duolingo currently has a consensus rating of “Hold” and an average price target of $206.32.

Duolingo Company Profile

Duolingo, Inc (NASDAQ:DUOL) is a technology-driven education company that operates a widely used language-learning platform. Founded in 2011 by Luis von Ahn and Severin Hacker, Duolingo offers a freemium service featuring bite-sized lessons, gamified exercises and adaptive learning algorithms. The company’s core product is its mobile and web application, which supports instruction in more than 40 languages, ranging from widely spoken tongues such as English and Spanish to lesser-taught options including Irish and Swahili.

In addition to its flagship language courses, Duolingo has expanded its product suite to include the Duolingo English Test, an on-demand, computer-based English proficiency exam designed for academic and professional admissions.