Duolingo (NASDAQ:DUOL) General Counsel Stephen C. Chen reported the sale of a total of 2,797 shares of Class A common stock in transactions executed on February 17 and 18, 2026, according to a Form 4 filing with the Securities and Exchange Commission.
The aggregate proceeds from the two days of selling came to $313,926. On February 17, Chen sold 896 shares at $110.06 per share, yielding $98,613. The following day, February 18, he sold 1,901 shares across multiple transactions at prices ranging from $111.83 to $115.47, producing proceeds of $215,313.
Company stock has been trading near a 52-week low of $107.16 and is down 74% over the past year. Internal analysis from InvestingPro referenced in the filing indicates the stock may be undervalued at current prices. Duolingo is scheduled to report earnings on February 26.
The February 18 trades were carried out under a Rule 10b5-1 trading plan that Chen adopted on May 27, 2025. Following these dispositions, Chen's direct holdings in Duolingo total 30,545 shares.
Context and analyst activity
Outside of the insider transactions, several sell-side firms and market participants have issued varied views on Duolingo's prospects and valuation:
- Truist Securities reiterated a Buy rating with a price target set at $245.00, calling attention to Duolingo's work on artificial intelligence for product development and personalization.
- DA Davidson trimmed its price target to $170 and maintained a Neutral rating, citing concerns about future user growth despite a notable January uptick in users.
- KeyBanc Capital Markets held its Sector Weight rating, pointing to questions about future growth in the context of a recent chief financial officer transition and a slowdown in third-party data.
- Citizens retained a Market Perform rating and highlighted the company’s experiments with character-led advertising, which they say have shown encouraging engagement metrics.
- Separately, T-Mobile has introduced real-time AI translation services, a competitive development that could affect Duolingo’s market positioning.
These items illustrate the dynamic environment Duolingo operates in, balancing product innovation and monetization efforts with competition and user-growth considerations.
Summary of the insider transaction
- Total shares sold by Stephen C. Chen: 2,797
- Total proceeds: $313,926
- February 17 trade: 896 shares at $110.06, proceeds $98,613
- February 18 trades: 1,901 shares at $111.83 - $115.47, proceeds $215,313 (executed under a Rule 10b5-1 plan adopted May 27, 2025)
- Shares held by Chen after the transactions: 30,545
Key takeaways
- Insider selling - A senior legal officer reduced his stake across two days, with part of the activity executed under a standing 10b5-1 plan.
- Stock price context - Duolingo is trading close to its 52-week low amid a 74% decline over the prior year.
- Analyst divergence - Brokerages remain split on the stock’s outlook and valuation, reflecting differing views on AI-driven product improvements and near-term user growth.
Risks and uncertainties
- Market valuation risk - The company’s share price sits near its 52-week low and has suffered a steep annual decline, which introduces valuation uncertainty for investors.
- Growth and competitive risk - Concerns about user growth, a CFO transition, and third-party data deceleration can impact revenue trends and investor sentiment.
- Competitive threat - New offerings from competitors, such as real-time AI translation services, may influence Duolingo’s market positioning and product differentiation.
InvestingPro subscribers are noted as having access to additional exclusive research items and metrics related to DUOL. The company’s next earnings release is scheduled for February 26.