How Duolingo Stock Outperformed the Market in September

Duolingo Stock

According to S&P Global Market Intelligence, Duolingo stock (NASDAQ:DUOL) increased 1.3% in September. The price gain isn’t spectacular in and of itself, but the language-learning specialist accomplished this moderately positive return during a month in which the S&P 500 index lost 9.3%. Duolingo’s steadiness stood out like a pail of water in the desert in such an atmosphere.

So, what Happened to Duolingo Stock?

Last month, the corporation didn’t have much to report. CEO Luis von Ahn had a few appearances in newspapers and social media feeds, highlighting his Guatemalan heritage and Duolingo’s position on impending abortion prohibitions in its home state of Pennsylvania, but these events had little impact on the stock.

Instead, Duolingo stock (NASDAQ:DUOL) rose on September 9 and 28, two of the overall market’s greatest days during this time. The S&P 500 gained 1.9% and 1.5% on those two days, while Duolingo gained 7.3% and 4.5%.

Duolingo, a previously high-flying growth company, was always hypersensitive to market sentiment, rising and dropping faster than most of its rivals. As a result, it appeared poised to recover quicker than the overall market last month. Duolingo stock (NASDAQ:DUOL) had plunged 27.4% in the preceding 52 weeks, significantly more than the S&P 500’s 12.6% drop at the same time.

So, What Now?

Never mind the stock’s plummeting price; Duolingo’s business never stopped; thus, it makes logical to see some color in the stock’s figurative cheeks again.

In the second-quarter report released in early August, daily active users jumped by 44%, while paid memberships soared by 71%. Consequently, sales increased by 50%, while free cash flow increased from $2.1 million to $9.9 million. In summary, the firm is attracting many users and paying customers, which adds to massive benefits on both the top and bottom lines.

In the second-quarter report and earnings call, Duolingo’s management never uttered the term “inflation.” The problem that is dragging on this company’s stock isn’t one worth addressing. In fact, Duolingo’s stock (NASDAQ:DUOL) should be growing by 2022.

But since that isn’t how market participants view the stock these days, we had to settle with a month of solid steadiness instead. Shares aren’t cheap by any means, but there seems to be a mismatch between the company’s phenomenal commercial success and the sinking stock chart. As a result, Duolingo stock (NASDAQ:DUOL) seems to be a no-brainer purchase right now.

Featured Image – Unsplash © jstrippa

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About the author: Okoro Chinedu is a freelance writer specializing in health and finance, with a keen interest in cryptocurrency and blockchain technology. He has worked in content creation and digital journalism. Since 2019, he has written on various online platforms, and his work has been recognized by several important media sources and specialists in finance and crypto. In addition to writing, Chinedu enjoys reading, playing football, posing as a medical student, and traveling.