Duolingo’s chief engineering officer sells over $300k in company stock By Investing.com

Duolingo, Inc.’s (NASDAQ:DUOL) Chief Engineering Officer, Natalie Glance, has sold a significant amount of company stock, according to a recent filing with the Securities and Exchange Commission. The transactions, which took place on September 6, 2024, involved the sale of 1,500 shares of Class A common stock, resulting in total proceeds exceeding $311,000.

The sales were executed in multiple transactions, with prices ranging from $205.232 to $210.925 per share. The weighted average prices for the shares sold varied, with one batch selling at an average of $205.232, another at $207.3967, the next group at $208.494, and the final lot at $210.925. These transactions were part of a prearranged trading plan under Rule 10b5-1, which allows company insiders to set up a predetermined schedule for buying or selling stocks at a time when they are not in possession of material non-public information.

Following the sales, Ms. Glance still holds a substantial number of Duolingo shares, with filings indicating ownership of 139,760 shares. Additionally, it is noted that 130 shares are indirectly owned by Ms. Glance’s son, demonstrating continued family investment in the company.

Investors often keep a close eye on insider transactions as they can provide insights into executives’ perspectives on the company’s future performance. Duolingo, known for its language learning platform, trades under the ticker DUOL on the NASDAQ and is a part of the prepackaged software industry within the technology sector.

The details of these transactions are publicly available as part of Duolingo’s commitment to transparency with its stakeholders. The company’s headquarters is located in Pittsburgh, PA, and continues to be a significant player in educational technology.

In other recent news, Duolingo Inc. has been receiving continued attention from financial firms. JPMorgan maintains an Overweight rating on Duolingo, expressing optimism about the company’s growth prospects, particularly regarding the rollout of Duolingo Max and strategies for monetizing paid subscribers. The firm projects a long-term revenue growth and a target of over 25% increase in bookings.

Piper Sandler also holds an Overweight rating, citing Duolingo’s strategic application of AI and expansion of primary language offerings as key growth drivers. The firm expects the company’s comprehensive use of AI to significantly benefit from advancements in technology.

KeyBanc, however, maintains a Sector Weight rating, expressing caution regarding the sustainability of user growth rates into 2025. The firm has adjusted its estimates for Duolingo’s earnings before interest, taxes, depreciation, and amortization (EBITDA) for 2024 and 2025 upwards by 6% and 11%, respectively, and projected a 2026 EBITDA at $360 million.

In terms of product development, Duolingo has introduced a new product, Max, currently available in five courses across 27 countries, with plans for global availability by year-end on both Android and iOS platforms. The full financial impact of Max is expected to materialize by 2025. These are among the recent developments for the company.

InvestingPro Insights

As Duolingo’s Chief Engineering Officer capitalizes on the company’s stock, current and prospective investors might find the latest metrics from InvestingPro enlightening. With a market capitalization of approximately $9.42 billion, Duolingo stands out in the educational technology sphere. The company’s P/E ratio, a measure of its current share price relative to its per-share earnings, is notably high at 137.06, reflecting investor expectations for future growth, despite the ratio adjusting slightly upward to 141.1 over the last twelve months as of Q2 2024.

InvestingPro Tips highlight that Duolingo is anticipated to experience net income and sales growth in the current year, which could explain the confidence reflected in the company’s stock valuation. Also noteworthy is the company’s gross profit margin, which at 73.31% over the last twelve months as of Q2 2024, underscores Duolingo’s efficiency in managing its production costs relative to its revenue. Investors may find these factors reassuring, especially when considering the strategic sales of shares by company insiders like Ms. Glance.

Furthermore, the strength of Duolingo’s balance sheet is evident, as it holds more cash than debt, indicating a solid financial position. Another positive sign for shareholders is the company’s liquidity, with liquid assets surpassing short-term obligations. While Duolingo does not pay a dividend, the company’s stock has seen a strong return over the last month, with a price total return of 15.86%.

For investors seeking more in-depth analysis, there are additional InvestingPro Tips available on Duolingo, which can be found at https://www.investing.com/pro/DUOL. These tips provide a broader context for evaluating the company’s financial health and growth prospects.

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