Shares of Duolingo (NASDAQ:DUOL) jumped Thursday on the back of news it will join the S&P MidCap 400.
The company's shares are currently up more than 8.5%, trading at around $211 per share. Following the news, the stock initially hit a high of $217.38.
The company will replace Cable One in the index, which will drop down to the S&P SmallCap 600.
Reacting to the news, analysts at JPMorgan said the company joining the index "should bode well for shares and further support increased investor interest."
The bank reiterated an Overweight rating on DUOL, stating that they prefer the risk/reward at current levels. Shares have been flattish since fourth-quarter earnings.
DUOL is set to report earnings on May 8. Looking ahead to the results, the investment bank said it believes there is potential upside to both DUOL's first quarter guide and 2024 outlook, which aligns with investor expectations based on their conversations.
"We believe Duolingo could raise its 2024 outlook based on solid 1Q trends & recent third-party data, strong marketing, & healthy execution — a full-year guidance raise would align with mgmt's historical beat & raise cadence," wrote analysts at JPMorgan.