DUOL heads into the summer with a sharply split story — the stock is up 7% on the week while short sellers quietly reduce exposure and an analyst just lifted his target by a third, yet the consensus still can't bring itself to say "buy."
The contrast between the stock's momentum and the Street's reluctance is the central tension this week. DUOL has climbed to $117.86, up 9% over the past month, and the week's 7% gain puts it well clear of education peers like COUR, which fell 3.6% on the week, and HRB, which was essentially flat. Yet even as the stock rallies, analyst price targets cluster well below the current price — the consensus mean is $106.31, roughly 10% below where shares are now trading. Buyers are outrunning the analysts who cover the name.
Short interest is elevated but the direction of travel is softening. Bears still hold roughly 18.9% of the free float — a high conviction short position by any measure — but that level has declined about 6% over the past month. The most recent daily reading fell another 2.5% to 7.56 million shares. The lending market reflects that reduced urgency: cost to borrow is a mere 0.43%, and availability at 146% means there are nearly one-and-a-half shares available for every one already borrowed. That is a relaxed borrow environment. The short score from ORTEX sits at 68.9, nudging higher this week, which indicates the overall configuration of short positioning remains structurally elevated even as individual bears trim. Options are similarly subdued — the put/call ratio of 0.70 is modestly below its 20-day average of 0.72, and well off any extreme reading. Whatever unease exists among short sellers, options traders aren't amplifying it.
The analyst picture captures the same ambivalence. DA Davidson's Wyatt Swanson raised his price target from $90 to $120 — a 33% lift — on June 9, which is the freshest piece of Street action and notable because the new target now sits above the current price. That makes it the most constructive near-term call in the visible data. But the firm held the rating at Neutral, a telling hesitation. JPMorgan's Bryan Smilek moved his target up just $2 to $94 after May earnings, while Morgan Stanley went the other direction, trimming to $95 from $100. The EV/EBITDA multiple has compressed slightly over the past month to 13.4x, while the P/E has drifted up to 16.4x as forward earnings estimates come down. Bulls point to Q1's revenue and adjusted EBITDA beats, strong paid subscriber growth, and the argument that the current discounted valuation is a buying opportunity. Bears counter with slowing monthly active user growth, competitive pressure in language learning, and the risk that engagement momentum stalls before the user base can be fully monetized.
Insider activity is worth noting, if only to contextualize. CEO Luis von Ahn and co-founder Severin Hacker both received equity awards and then sold a portion of the new shares on May 27 — von Ahn cleared roughly $5.9 million and Hacker $3.4 million at around $107.82 per share. These were structured transactions tied to award vesting, not discretionary sales, and the 90-day net share count for insiders is actually positive at 101,000 shares. A cluster of smaller sales from the general counsel and chief science officer in mid-May round out the picture — routine in shape, not directional.
The next scheduled catalyst is Q2 earnings on August 6. History provides a sober backdrop: the last two quarterly prints both produced negative next-day moves, the most recent a 4.7% decline, the prior one 6.5%. With the stock now trading above where most analysts have their targets, the bar heading into August is higher than it was in May. What to watch between now and then is whether the short interest erosion continues — if bears keep trimming while the stock holds above $115, the gap between the consensus target and the market price will need resolving one way or the other.
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