Duolingo shares have dropped 24% recently, despite strong global brand momentum. Analyst Bryan M. Smilek lowered the price forecast from $580 to $500 and reaffirmed an Overweight rating for Duolingo. Concerns over engagement trends and AI-first strategy impacting share performance.

JP Morgan analyst Smilek expects second quarter DAU growth between 40% to 42%, near the lower end of management’s guidance. He projects adjusted EBITDA margins to improve significantly in the second half of the year, driven by AI-related cost savings. Smilek remains bullish on Duolingo’s potential in the global market.

Smilek anticipates Duolingo’s second-quarter results will exceed guidance and expects the company to raise its full-year outlook for bookings and adjusted EBITDA. The forecast reflects factors like monetization from Duolingo Max, higher pricing for Super, and increased Family Plan adoption. Smilek believes current guidance could be conservative.

DUOL shares are currently trading lower by 0.41% at $359.87. Analysts maintain ratings, with Evercore ISI Group and Piper Sandler both maintaining Outperform and Overweight ratings, respectively. Piper Sandler has consistently maintained an Overweight rating for Duolingo since January 2022.

Read more at Yahoo Finance.: Duolingo Set For Q2 Bookings Beat, Guidance Likely Conservative