Duolingo, Inc. (DUOL) Hits Fresh High: Is There Still Room to Run?

Have you been paying attention to shares of Duolingo, Inc. (DUOL)? Shares have been on the move with the stock up 8.8% over the past month. The stock hit a new 52-week high of $324 in the previous session. Duolingo, Inc. has gained 39.2% since the start of the year compared to the 26% move for the Zacks Business Services sector and the 50.5% return for the Zacks Technology Services industry.What's Driving the Outperformance?The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on November 6, 2024, Duolingo reported EPS of $0.49 versus consensus estimate of $0.36 while it beat the consensus revenue estimate by 2.08%.For the current fiscal year, Duolingo is expected to post earnings of $2 per share on $736.1 million in revenues. This represents a 471.43% change in EPS on a 38.6% change in revenues. For the next fiscal year, the company is expected to earn $2.91 per share on $945.59 million in revenues. This represents a year-over-year change of 45.34% and 28.46%, respectively.Valuation MetricsDuolingo may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.Duolingo has a Value Score of F. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of B.In terms of its value breakdown, the stock currently trades at 157.7X current fiscal year EPS estimates, which is a premium to the peer industry average of 26.8X. On a trailing cash flow basis, the stock currently trades at 579.9X versus its peer group's average of 12.5X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.Zacks RankWe also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Duolingo currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Duolingo meets the list of requirements. Thus, it seems as though Duolingo shares could have potential in the weeks and months to come.How Does DUOL Stack Up to the Competition?Shares of DUOL have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Vimeo, Inc. (VMEO). VMEO has a Zacks Rank of # 1 (Strong Buy) and a Value Score of C, a Growth Score of B, and a Momentum Score of A.Earnings were strong last quarter. Vimeo, Inc. beat our consensus estimate by 400%, and for the current fiscal year, VMEO is expected to post earnings of $0.12 per share on revenue of $411.99 million.Shares of Vimeo, Inc. have gained 43.2% over the past month, and currently trade at a forward P/E of 51.22X and a P/CF of 43.75X.The Technology Services industry is in the top 29% of all the industries we have in our universe, so it looks like there are some nice tailwinds for DUOL and VMEO, even beyond their own solid fundamental situation.Free: 5 Stocks to Buy As Infrastructure Spending SoarsTrillions of dollars in Federal funds have been earmarked to repair and upgrade America’s infrastructure. In addition to roads and bridges, this flood of cash will pour into AI data centers, renewable energy sources and more.In, you’ll discover 5 surprising stocks positioned to profit the most from the spending spree that’s just getting started in this space.Download How to Profit from the Trillion-Dollar Infrastructure Boom absolutely free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Duolingo, Inc. (DUOL): Free Stock Analysis Report Vimeo, Inc. (VMEO): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks