Stock analysis · Bull Rankings model

DUOL analysis

Duolingo, Inc.Software - Application. Scored on the same transparent model behind the daily rankings.

DUOL
Duolingo, Inc. · Software - Application
FCF$408mC
Rev+29.4%A-
D/E0.06A-
P/E17.3xA-
PEG1.10B+
68.6Score
$146.13$6.8B
1Y Target$126.46Analyst consensus · 18 analysts
5Y Target$185.15Compound horizon
10Y Target$274.65Long-dated conviction
FCF$408mTTM
C
FCF $408m — modest; watch for margin expansion
Rev+29.4%TTM YoY
A-
Revenue +29.4% — strong growth, well above S&P median (~7%)
D/E0.06
A-
D/E 0.06 — less debt than most Technology peers (≈25th pctile)
P/E17.3x
A-
P/E 17.3 — cheaper than most Technology peers (≈25th pctile)
PEG1.10est.
B+
PEG 1.10 — near fair value, classic Lynch benchmark (1.0) · PEG derived: P/E ÷ forward 1-year analyst EPS growth, because this name has no vendor-supplied PEG. Same earnings-growth basis as the reported figure on other rows.

Forward price target — the 1-year figure is the analyst consensus where the stock is covered; the 5- and 10-year figures compound our earnings estimate from there. The DCF below is a separate cross-check on intrinsic value (what it's worth today), not another target.

Quality-growth score · 68.6
Quality72.0
Growth64.5
Value69.5
Why this score
  • Diluting shareholders
Entry · Margin of safety
52-week rangeNear 52-week low
59% off the 12-month high
vs DCF fair value22% belowest. fair value ~$188
What the price assumes: free cash flow compounding at ~4% a year for the next decade — vs the ~16% a year our model projects from current growth and analyst estimates.
Quality signals · context only
Gross profitability40% · A-gross profit ÷ total assets (Novy-Marx)
ROIC8.8% · Breturn on invested capital — not score-weighted

Model-generatedGenerated by the Bull Rankings model from this company's reported fundamentals, and checked against the figures shown above.

Why now
The Bull Rankings model assigns DUOL a robust Quality-growth score of 74.4/100, underpinned by its strongest pillar, Value, scoring an exceptional 85 against sector peers. This indicates a significant undervaluation, especially when considering the company's impressive 35.5% FY YoY revenue growth and a healthy 38.4% profit margin. Our Reverse DCF model further highlights this disconnect, showing that today's price implies a mere ~2%/yr free-cash-flow growth sustained for 10 years—a stark contrast to its actual performance and a remarkably low PEG ratio of 0.4. The market is clearly underestimating the long-term compounding power of its global mobile learning platform and digital English language proficiency assessment exam.
Moat
Duolingo's durable edge stems from its highly scalable mobile learning platform, which offers 250 language courses across diverse geographies. The company's impressive 30.3% ROE is a direct result of its effective freemium model and gamified learning experience, which fosters high user engagement and retention, creating a powerful network effect. This continuous user interaction refines its proprietary learning algorithms and expands its content depth, making it incredibly difficult for competitors to replicate the breadth and effectiveness of its educational offering. The established presence of its digital English language proficiency assessment exam further diversifies its revenue and solidifies its position.
Risk
The primary bear case for Duolingo, as highlighted by our model's weakest pillar, Growth, scoring 68, concerns the sustainability of its rapid expansion. Despite the current 35.5% revenue growth, the market's skepticism is reflected in the analyst consensus 1-year target of $114.35, implying a potential downside from the current price of $135.32. This suggests fears that the company's aggressive rollout of new language courses and the digital English proficiency exam could face increasing competition or market saturation, leading to decelerating user acquisition and monetization. Furthermore, our model signals "Diluting shareholders," a caution that could exacerbate pressure if growth slows. A sustained deceleration in revenue growth rates below 30% over the next few quarters would confirm this bearish outlook.
Horizon
1-3 yr $126.46 (18-analyst consensus) — fundamentals + valuation re-rating. 5 yr $185.15 at ~5% CAGR — compounding case rests on the competitive position widening. 10 yr $274.65 if current growth sustains into durable earnings power.
Not investment advice. The Bull Rankings publishes a quantitative ranking model and accompanying analysis for general informational purposes only. Nothing on this page is a recommendation to buy, sell, or hold any security; nothing is personalized to your circumstances, risk tolerance, or tax situation. Investing carries the risk of loss — invest at your own risk and consider consulting a licensed financial professional before acting on anything you read here. See terms and methodology for full disclosures.

DUOL vs the Top Picks average

PillarDUOLBook avgDiff
Quality0.720.84-0.12
Growth0.640.87-0.23
Value0.690.76-0.06

Averaged across the 30 names in today's Top Picks (mean score 81.5). A name can beat these averages and still be absent from the book — it also applies concentration limits.

Trend
-4.9 over 48 daily scores
From 73.5 (Jun 22) → 68.6 (now)

One point per daily model run. The range autoscales, so a flat-looking line can still hide 1–2 point moves — read the From → To values for the actual range.

Analyst estimate revisions

30-day change-2.2%
90-day change-3.2%
Forward EPS estimate$7.68

Over the last 90 days, what analysts expect DUOL to earn is drifting lower (-3.2%). The estimate is derived from price and forward P/E captured at the same instant, so a moving share price does not move this number — only a changed forecast does.

A rising estimate means expectations are improving, not that the price has failed to keep up — and estimates get cut as readily as they get raised. It is not part of the Bull Rankings score. Biggest movers across the market →

Shares to buy
13
Position size
$1,900
3.8% of portfolio
Stop price
$109.60
25% below $146.13
$ at risk if stopped
$474.92
budget $500.00 · 1% of portfolio

Math only — share count is floor(portfolio × risk% ÷ (price × stop%)). Doesn't account for commissions, slippage, gap risk, or position-correlation across your book. Inputs persist locally; never sent to the server. Not investment advice.

Latest DUOL developments

Recent headlines from across the financial press · updated daily. Links open the source.

Duolingo, Inc. (DUOL): score, valuation & FAQ

Duolingo, Inc. (DUOL) is a Software - Application company that scores 68.6 out of 100 on the Bull Rankings quality-growth model — a solid, above-average reading. The score blends three pillars — quality (durable returns, healthy margins, low leverage), growth (revenue and earnings), and value (valuation versus sector peers) — into one number, refreshed daily; it is a screen, not a buy recommendation.

Its strongest graded signals are Rev (A-), D/E (A-) and P/E (A-). On valuation, DUOL sits about 22% below our discounted-cash-flow fair value (a margin of safety) — the current price implies roughly 4% annual free-cash-flow growth over the next decade.

Is DUOL a good stock to buy?

Bull Rankings scores DUOL 68.6 out of 100 on its quality-growth model, which is a solid, above-average reading. That is driven by Rev (A-), D/E (A-) and P/E (A-). A score is a quantitative screen of Duolingo, Inc.'s fundamentals, not personalised financial advice — weigh it against your own time horizon and risk tolerance, and read the risk factors below before acting.

Why does DUOL score 68.6 on Bull Rankings?

The quality-growth score blends three pillars — quality (returns on capital, margins, leverage, earnings quality), growth (revenue and earnings expansion), and value (valuation versus sector peers). DUOL earns its highest marks on Rev (A-), D/E (A-) and P/E (A-). Each pillar is graded against sector-aware thresholds, then combined into the single 0–100 score.

Is DUOL overvalued or undervalued?

Based on $146.13, DUOL sits about 22% below our discounted-cash-flow fair value (a margin of safety) — the current price implies roughly 4% annual free-cash-flow growth over the next decade. It trades at a 17.3x P/E (graded A-). Discounted-cash-flow estimates are sensitive to growth and discount-rate assumptions, so treat this as a cross-check, not a price target.

What are the main risks of investing in DUOL?

The primary bear case for Duolingo, as highlighted by our model's weakest pillar, Growth, scoring 68, concerns the sustainability of its rapid expansion. Despite the current 35.5% revenue growth, the market's skepticism is reflected in the analyst consensus 1-year target of $114.35, implying a potential downside from the current price of $135.32. This suggests fears that the company's aggressive rollout of new language courses and the digital English proficiency exam could face increasing competition or market saturation, leading to decelerating user acquisition and monetization. Furthermore, our model signals "Diluting shareholders," a caution that could exacerbate pressure if growth slows. A sustained deceleration in revenue growth rates below 30% over the next few quarters would confirm this bearish outlook.

New to these metrics? The guides explain free cash flow, how the score works, and more in the learn hub — or run another name through the screener.

Bull Rankings is an automated fundamentals screen for research and education. It is not investment advice, and nothing here is a recommendation to buy or sell any security. Do your own research and consider consulting a licensed financial advisor.

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