Duolingo (NASDAQ:DUOL) is on the rise today after receiving an upgrade from JMP Securities analyst Andrew Boone. The analyst upgraded Duolingo from Market Perform to Market Outperform, with a price target of $260.
Boone cited several factors for the upgrade, including the broader rollout of Duolingo’s Max feature, optimized subscription tiers and Family Plan, and the introduction of a new conversational experience. These developments are expected to be significant catalysts for continued growth for Duolingo.
The Max feature, which was initially rolled out to a small percentage of users in April, is set to expand to more users in the coming months. Additionally, Duolingo is focusing on improving its Family Plan to drive retention.
Furthermore, Duolingo is testing an AI-powered conversational experience that allows users to speak with Duolingo characters. Initial reactions to the tests have been positive, with users enjoying the interactive and engaging nature of the feature.
Boone highlighted that Duolingo’s new conversational experience provides a very different user experience compared to other language learning platforms like ChatGPT. The conversations will be structured around course lessons, integrating seamlessly with Duolingo’s existing learning structure.
With Duolingo shares down year-to-date, Boone believes that the current valuation is more reasonable, presenting an opportunity for investors. Overall, the upgrades and new features are expected to drive growth and increase user engagement for Duolingo in the future.
