PITTSBURGH—Matthew Skaruppa, Chief Financial Officer of Duolingo Inc. (NASDAQ:DUOL), has sold a significant portion of his holdings in the language-learning platform. According to a recent filing with the Securities and Exchange Commission, Skaruppa disposed of multiple tranches of Class A Common Stock on December 16, totaling $4.95 million. The sale comes as Duolingo, now valued at $15.58 billion, demonstrates strong financial performance with 42.47% revenue growth and impressive 73.13% gross margins in the last twelve months.
The shares were sold at prices ranging from $339.05 to $350.30 per share. Following these transactions, Skaruppa retains ownership of 67,730 shares of Duolingo stock. The sales were conducted under a pre-arranged trading plan, as noted in the filing.
Investors often scrutinize such insider sales for potential insights into the executive's outlook on the company's future performance. However, these transactions were part of a pre-established plan, which can mitigate concerns about their timing.
In other recent news, Duolingo Inc. has seen significant developments. The language learning platform reported a substantial increase in daily active users (DAUs), up 54% year-over-year, during its Third Quarter 2024 Earnings Call. This growth has prompted the company to raise its full-year guidance, with anticipated bookings growth of 36% and revenue growth of 40%. Additionally, Duolingo's new AI-powered video call feature, part of the Duolingo Max subscription tier, has been introduced to about half of its users, with plans for further expansion.
On the other hand, BofA Securities has adjusted its position on Duolingo. The firm downgraded the company from "Buy" to "Neutral," citing less upside potential due to the company's shares trading at peak valuation. Despite recognizing Duolingo's consistent growth and high-quality status, BofA Securities believes that the current market valuation may already reflect the potential growth. The firm also increased the price target to $375, up from $355, considering the overall higher sector valuation.
These developments reflect recent changes in Duolingo's performance and market position. While BofA Securities' downgrade might seem cautious, it is worth noting that Duolingo's strategies, including its ability to attract users virally and its efforts to scale international markets, have been recognized as key growth drivers.
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