Needham analyst Ryan MacDonald raised the price forecast on Duolingo ( DUOL ) from $385 to $400 while maintaining a Buy rating.

The company reported mixed fourth-quarter results on Thursday. Revenue of $209.6 million beat the consensus of $205.4 million, and EPS of $0.28 missed the consensus estimate of $0.50.

Duolingo ( DUOL ) sees revenues of $220.5 million – $223.5 million for the first quarter (vs. consensus of $221.069 million) and $962.5 million – $978.5 million for FY25 (vs. estimate of $965.882 million).

The analyst’s bullish stance reflects strong fourth-quarter results, with both revenue and earnings surpassing expectations.

Highlights include another quarter of 50%+ DAU growth and a surge in subscription bookings to 50%, fueled by early adoption of the premium Duolingo Max tier and an improved Family Plan mix, adds the analyst.

The analyst says that although shares are down due to a weaker-than-expected FY25 adjusted EBITDA guidance, he notes DUOL’s increased investments in enhancing its GenAI-powered Video Call feature positions it for long-term growth.

MacDonald writes that he is prepared to endure short-term challenges for long-term gains and sees the initial revenue guidance as conservative, which provides room for the company to maintain its beat-and-raise momentum in FY25.

Price Action: DUOL shares are down 14.11% at $322.74 at the last check Friday.

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