TLDR
- Evercore ISI upgraded Duolingo to “Outperform” and raised its price target to $210, implying over 40% upside
- DA Davidson raised its price target to $175 from $160, keeping a Buy rating, citing strong DAU data
- Q2 revenue came in at $298.5 million, beating estimates, with daily active users up 23% year over year to 58.7 million
- Third-quarter DAU growth is tracking between 25.6% and 27.6% year over year based on DA Davidson’s in-house data
- Duolingo announced a $400 million share repurchase programme alongside its Q2 results
Duolingo (DUOL) stock climbed 3.8% in pre-market trading on Tuesday after Evercore ISI upgraded the stock and lifted its price target to $210.
Evercore analyst Mark Mahaney moved the stock to “Outperform” from “In Line.” The new target is based on 20 times estimated 2028 EBITDA and implies more than 40% upside from recent levels.
The firm also raised its EPS estimates, now sitting 10% above Wall Street consensus for 2027 and 25% above for 2028.
Duolingo traded at $148.36 before the pre-market move, with the after-hours price reflecting at $158.55.
The Evercore upgrade was not the only analyst action Tuesday. DA Davidson raised its price target to $175 from $160, maintaining its Buy rating on the stock.
DA Davidson analyst Wyatt Swanson based the call on the firm’s in-house tracking data covering more than 170,000 existing Duolingo users.
That data points to Q3 DAU growth landing between 25.6% and 27.6% year over year. August DAUs rose 1.3% month over month, up from 0.6% in the prior update.
The final week of August, from August 22 to August 29, was up 1.8% week over week. That marked the strongest weekly growth since Duolingo’s streak revival event in early June.
Both older user cohorts from 2011 to 2017 and newer users from 2024 to 2026 showed growth during that final week.
Strong Q2 Results Set the Stage
These analyst moves follow Duolingo’s second-quarter earnings, which gave analysts plenty to work with. Revenue came in at $298.5 million, beating consensus estimates.
Daily active users rose 23% year over year to 58.7 million. The company also announced a $400 million share repurchase programme alongside those results.
Revenue grew 29% year over year with gross profit margins at 73%, according to InvestingPro data. DA Davidson’s $175 target implies 23.5 times and 18.5 times its 2026 and 2027 EBITDA estimates respectively.
The firm noted its DAU tracking data has historically underestimated reported results by 100 to 200 basis points, suggesting actual Q3 numbers could come in higher.
Broader Market Context
Duolingo’s pre-market gains came against a weak broader tape. S&P 500 futures were down around 0.6% and Nasdaq-100 futures fell close to 1%.
Markets were watching renewed U.S.-Iran tensions, rising crude oil prices, and shifting Federal Reserve policy expectations.
Investors were also waiting on the JOLTS job openings report, with Friday’s monthly employment data still to come.
Citizens currently holds a Market Perform rating on Duolingo, with the stock trading at 14.8 times its 2027 estimated EBITDA of $382 million.
Duolingo separately disclosed daily active user growth of 27.4% year over year based on August 2026 data, which came out ahead of DA Davidson’s tracking estimates.
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