Duolingo (DUOL) AI Stock Analysis

• Market Cap: $15.41B
• Dividend Yield: N/A
• Average Volume (3M): 969.31K
• Price to Earnings (P/E): 169.3
• Beta (1Y): 1.74
• Revenue Growth: 39.14%
• EPS Growth: 103.72%
• Country: US
• Employees: 830
• Sector: Technology
• Sector Strength: 92
• Industry: Software - Application
• EPS (TTM): 0.72
• Shares Outstanding: 39,260,630
• 10 Day Avg. Volume: 955,883
• 30 Day Avg. Volume: 969,309
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.92
• Enterprise Value/Revenue: 17.40
• Enterprise Value/Gross Profit: 24.14
• Enterprise Value/Ebitda: 176.28
• 1Y Price Target: $497.45
• Price Target Upside: 46.18% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 12

• Rating: 62 Neutral
• Price Target: $377.00 ▲(10.78% Upside)

Duolingo's overall stock score is influenced by its strong financial performance, marked by robust revenue growth and improved profitability. However, the technical analysis indicates bearish momentum, and the high P/E ratio suggests overvaluation. While the earnings call provided some positive insights, challenges with gross margins and monetization persist.

Positive Factors

Financial Performance

DUOL’s solid track record vs. guidance, having beaten Revenue and EBITDA guidance in each of the last 8+ quarters.

Growth Potential

The secular shift toward online language learning and deeper monetization are expected to support over 20% bookings/revenue growth for Duolingo.

Negative Factors

Market Performance

Duolingo shares have traded down -30% since recent highs, significantly underperforming the SPX +6%, driven by investor concern around 3P data that has suggested greater than expected user growth deceleration.

User Growth

Investor concern has been driven by 3P data suggesting greater than expected user growth deceleration & Subscription Bookings growth deceleration and an uptick in Max churn.

Duolingo Business Overview & Revenue Model

Company Description

Duolingo, Inc. (DUOL) is a leading technology company operating in the education sector, primarily focused on language learning solutions. Founded in 2011 and headquartered in Pittsburgh, Pennsylvania, Duolingo offers a widely popular mobile app and web-based platform designed to make language education accessible, engaging, and effective. The company utilizes gamification and data-driven teaching methodologies to offer courses in over 30 languages, catering to a global user base seeking to learn new languages or enhance their proficiency.

How the Company Makes Money

Duolingo generates revenue through a multifaceted business model. The primary revenue stream is its subscription service, Duolingo Plus, which offers users an ad-free experience, offline access, and other premium features. Additionally, Duolingo earns money through in-app advertisements shown to free-tier users. The company also capitalizes on the Duolingo English Test, an online, convenient, and widely accepted English proficiency assessment that serves educational institutions and individuals. Moreover, partnerships with educational entities and institutions contribute to its financial growth by integrating its platform into formal learning environments. These revenue streams, along with strategic investments in technology and content expansion, drive Duolingo's financial performance.

Duolingo Financial Statement Overview

Summary

Duolingo exhibits a robust financial profile marked by strong revenue growth, improved profitability, and solid cash flow generation. The balance sheet is healthy, with manageable debt levels and a strong equity position. Overall, the company is well-positioned for sustainable growth in the competitive software application industry.

Income Statement

Duolingo shows strong revenue growth with a remarkable increase from $748.0 million in 2024 to $811.2 million in TTM 2025. Gross and net profit margins have improved significantly, indicating enhanced profitability. The EBIT and EBITDA margins reflect positive operational efficiency, showcasing the company's ability to convert revenue into earnings effectively.

Balance Sheet

The balance sheet is stable with a healthy equity ratio and relatively low debt-to-equity ratio, indicating prudent financial leverage. Return on equity has improved, reflecting increased shareholder value. The company's strong cash position further underscores its financial stability.

Cash Flow

Duolingo's cash flow statement demonstrates robust operating cash flow generation and positive free cash flow growth. The operating cash flow to net income ratio is strong, indicating efficient cash earnings. Consistent free cash flow growth supports future investments and financial flexibility.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	748.02M	531.11M	369.50M	250.77M	161.70M
Gross Profit	544.38M	389.00M	270.06M	181.59M	115.71M
EBITDA	74.66M	-5.83M	-60.03M	-57.28M	-13.76M
Net Income	88.57M	16.07M	-59.57M	-60.13M	-15.78M
Balance Sheet
Total Assets	1.30B	953.96M	747.35M	661.31M	175.74M
Cash, Cash Equivalents and Short-Term Investments	877.64M	747.61M	608.18M	553.92M	120.49M
Total Debt	54.66M	25.04M	28.41M	29.12M	9.24M
Total Liabilities	477.18M	298.46M	205.27M	148.25M	256.43M
Stockholders Equity	824.55M	655.50M	542.08M	513.06M	-80.69M
Cash Flow
Free Cash Flow	273.40M	139.93M	43.53M	2.96M	13.69M
Operating Cash Flow	285.51M	153.61M	53.66M	9.17M	17.71M
Investing Cash Flow	-217.33M	-13.58M	-14.17M	-6.21M	-4.01M
Financing Cash Flow	-30.00M	2.13M	14.78M	430.47M	46.95M

Duolingo Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 340.31
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DUOL, the sentiment is Negative. The current price of 340.31 is below the 20-day moving average (MA) of 359.06, below the 50-day MA of 423.29, and below the 200-day MA of 370.52, indicating a bearish trend. The MACD of -20.67 indicates Negative momentum. The RSI at 34.82 is Neutral, neither overbought nor oversold. The STOCH value of 37.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DUOL.

Duolingo Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	69 Neutral	¥234.01B	14.95	7.54%	2.58%	9.26%	5.89%
SPT	63 Neutral	$962.89M	―	-36.95%	―	17.79%	16.49%
DUOL	62 Neutral	$15.41B	169.31	12.06%	―	39.14%	103.72%
NUKK	―	$32.50M	0.29		―	―	―
DSP	70 Neutral	$852.78M	452.82	4.15%	―	30.64%	―
FRGE	62 Neutral	$253.96M	―	-30.28%	―	14.78%	16.74%
NRDY	48 Neutral	$263.35M	―	-104.69%	―	-1.64%	9.99%

Duolingo Corporate Events

Duolingo Holds 2025 Annual Stockholders Meeting

On June 11, 2025, Duolingo, Inc. held its 2025 Annual Meeting of Stockholders, where approximately 97.64% of the company’s voting power was represented. During the meeting, three Class I directors were elected, and the appointment of Deloitte & Touche LLP as the independent registered public accounting firm was ratified. Additionally, the compensation of the company’s named executive officers was approved on an advisory basis.

The most recent analyst rating on (DUOL) stock is a Hold with a $183.00 price target. To see the full list of analyst forecasts on Duolingo stock, see the DUOL Stock Forecast page.