"Duolingo ( NASDAQ: DUOL) shares are down 45% in the last month, coinciding with an implosion of retail investor sentiment. 24/7 Wall St's Social Sentiment Score for DUOL has plunged to the 22-28 range (on a 0-100 scale) as of this morning. Once a darling stock on communities like Reddit and X, DUOL is being tar and feathered after poor earnings. One viral post titled "Duolingo Got Creamed and I Still Think It's Overvalued" dominated the conversation on r/stocks and r/investing."
"The shift in sentiment stems from deep skepticism about Duolingo's ability to sustain its premium valuation and organic growth trajectory. A detailed analysis by Reddit user rarebirdcapital gained massive traction, accumulating 481 upvotes and 156 comments on r/stocks alone. The post argues that even after losing $10 billion in market capitalization, the stock remains overvalued, stating: "I still think it's overvalued, and I think the fair value is around $162/share." This implies 9% additional downside from current levels."
Shares fell 45% in the last month while social sentiment dropped to the 22-28 range on a 0-100 scale. Revenue rose 41% year-over-year to $252.27 million but missed analyst estimates of $260.35 million. Daily active users increased 36% to over 50 million and operating income jumped 145.79% to $33.4 million. Trading volume spiked to 13.06 million shares on November 6, and selling pressure persisted. Market reaction reflects skepticism about sustaining a premium valuation and organic growth, with a circulated valuation placing fair value near $162 per share.
Read at 24/7 Wall St.
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