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Duolingo
(NASDAQ:DUOL)
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Rating:78Outperform
Price Target:
$176.00
▲(20.51% Upside)
Action:Reiterated
Date:08/11/26
DUOL scores well primarily on financial performance (high margins, improved profitability, and low leverage) and a constructive earnings outlook (higher EBITDA margin target, strong cash generation, and buybacks). The score is held back by only moderate technical strength (still below the 200-day average, mostly neutral momentum) and the need to watch near-term cash-flow variability and the monetization lag highlighted on the earnings call.
Positive Factors
User Growth and Retention
Strong DAU expansion combined with record retention indicates durable engagement and improving product habit formation. A larger, more active user base can compound organically, broaden the addressable audience, and support future subscription, advertising, and assessment monetization.
Negative Factors
Monetization Lags User Growth
The gap between rapid user growth and more modest bookings growth means engagement is not converting into revenue at the same pace. If this lag persists, near-term revenue productivity and the economic return on continued user acquisition could remain constrained.
Read all positive and negative factors
Positive Factors
Negative Factors
User Growth and Retention
Strong DAU expansion combined with record retention indicates durable engagement and improving product habit formation. A larger, more active user base can compound organically, broaden the addressable audience, and support future subscription, advertising, and assessment monetization.
Read all positive factors
Duolingo Key Performance Indicators (KPIs)
Any
Monthly Active Users
Captures the size of Duolingo’s active user base over a month, indicating reach and brand traction. Trends in MAU reveal user acquisition strength, seasonal patterns, and the addressable market for upselling to paid tiers.
Captures the size of Duolingo’s active user base over a month, indicating reach and brand traction. Trends in MAU reveal user acquisition strength, seasonal patterns, and the addressable market for upselling to paid tiers.
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The Fly
The FlyDuolingo (DUOL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.23B
Dividend YieldN/A
Average Volume (3M)1.33M
Price to Earnings (P/E)16.4
Beta (1Y)1.48
Revenue Growth29.36%
EPS Growth241.66%
CountryUS
Employees900
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)8.90
Shares Outstanding40,387,012
10 Day Avg. Volume1,104,608
30 Day Avg. Volume1,332,439
Financial Highlights & Ratios
PEG Ratio0.06
Price to Book (P/B)5.96
Price to Sales (P/S)7.74
P/FCF Ratio21.73
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$137.69Price Target Upside-5.72% Downside
Rating ConsensusHold
Number of Analyst Covering17
EPS Forecast (FY)2.75
Revenue Forecast (FY)$1.21B
Duolingo Business Overview & Revenue Model
Company Description
Duolingo, Inc. builds and operates an online platform and a mobile application dedicated to language learning, catering to audiences in both the United States and China. The company's comprehensive curriculum spans 40 diverse languages, featuring ...
How the Company Makes Money
Duolingo generates revenue primarily through a mix of subscriptions, advertising, and assessment fees. (1) Subscriptions: The company sells paid premium subscriptions (commonly branded as Super Duolingo and, for some users, Duolingo Max) that offe...
Duolingo Earnings Call Summary
Earnings Call Date:Aug 05, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 11, 2026
Earnings Call Sentiment Positive
The call conveyed strong operating momentum — notably 23% DAU growth, all-time high retention, successful reengagement campaigns, improving margins and significant cash generation — while also acknowledging near-term monetization lags, ongoing experiments on pricing/tiers, and material AI/hosting and regulatory considerations. Management reiterated deliberate investment in user growth and teaching quality, alongside measured steps to expand monetization with an improving cost structure driven by open-source AI.Positive Updates
Daily Active Users Growth
DAUs grew 23% year-over-year in Q2, accelerating from Q1 and slightly ahead of expectations; management is encouraged by early Q3 trends and targeting 100M DAUs by 2028.
Negative Updates
Monetization Lags DAU Growth
Management noted users don’t monetize immediately, so the DAU acceleration has not driven a proportionate near-term uplift to bookings; full-year bookings guide was kept relatively conservative despite DAU strength.
Read all updates
Q2-2026 Updates
Positive
Negative
Daily Active Users Growth
DAUs grew 23% year-over-year in Q2, accelerating from Q1 and slightly ahead of expectations; management is encouraged by early Q3 trends and targeting 100M DAUs by 2028.
Read all positive updates
Company Guidance
Management reiterated full‑year bookings and revenue target ranges of 10–12% and 15–18%, respectively, and gave point estimates for 2026 of ~11% bookings growth and ~16% revenue growth (bookings ~0.5ppt higher at constant FX); they raised the target adjusted EBITDA outlook to 26.5% (from 25%) while expecting adjusted EBITDA of about $320M (~25.5% margin) and netting >$375M of free cash flow for the year, with gross margin now expected closer to 70% (vs. prior 69%) due to more AI content and AI cost savings; Q3 guidance calls for bookings ≈ $307M (+9%), revenue ≈ $302M (+11%), gross margin 71% and adjusted EBITDA ≈ $76M (~25.2% margin); the company exited the quarter with $1.3B in cash & investments, generated $79M of FCF in Q2, repurchased ~$44M of stock in the quarter (cumulative repurchases $72M, ~700k shares), and noted a contingent bonus plan that would pay roughly $10M in cash if Q4 DAU growth is ≥25% (not included in guidance).Duolingo Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
83
Very Positive
Cash Flow
78
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.15B | 1.04B | 748.02M | 531.11M | 369.50M | 250.77M |
| Gross Profit | 828.33M | 743.72M | 538.84M | 383.93M | 266.06M | 180.89M |
| EBITDA | 206.66M | 196.80M | 113.16M | 24.87M | -53.77M | -57.23M |
| Net Income | 410.77M | 414.06M | 88.57M | 16.07M | -59.57M | -60.13M |
Balance Sheet | ||||||
| Total Assets | 2.07B | 1.99B | 1.30B | 953.96M | 747.35M | 661.31M |
| Cash, Cash Equivalents and Short-Term Investments | 1.31B | 1.14B | 877.64M | 747.61M | 608.18M | 553.92M |
| Total Debt | 86.14M | 93.78M | 57.24M | 25.04M | 28.41M | 32.46M |
| Total Liabilities | 664.21M | 645.18M | 477.18M | 298.46M | 205.27M | 148.25M |
| Stockholders Equity | 1.41B | 1.35B | 824.55M | 655.50M | 542.08M | 513.06M |
Cash Flow | ||||||
| Free Cash Flow | 405.20M | 369.73M | 273.40M | 150.42M | 48.09M | 5.58M |
| Operating Cash Flow | 430.55M | 387.82M | 285.51M | 153.61M | 53.66M | 9.17M |
| Investing Cash Flow | -103.33M | -107.68M | -217.33M | -13.58M | -14.17M | -6.21M |
| Financing Cash Flow | -122.57M | -29.55M | -30.00M | 2.13M | 14.78M | 430.47M |
Duolingo Technical Analysis
Positive
146.04
Price Trends
135.67
Positive
123.96
Positive
131.22
Positive
Market Momentum
5.45
Negative
52.43
Neutral
50.78
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DUOL, the sentiment is Positive. The current price of 146.04 is above the 20-day moving average (MA) of 145.21, above the 50-day MA of 135.67, and above the 200-day MA of 131.22, indicating a bullish trend. The MACD of 5.45 indicates Negative momentum. The RSI at 52.43 is Neutral, neither overbought nor oversold. The STOCH value of 50.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DUOL.
Duolingo Risk Analysis
Duolingo disclosed 55 risk factors in its most recent earnings report. Duolingo reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Duolingo Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $7.23B | 16.45 | 30.11% | ― | 29.36% | 241.66% | |
74 Outperform | $838.23M | 6.08 | 16.63% | ― | -3.75% | -3.09% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | $396.49M | 33.15 | 1.96% | ― | 13.62% | ― | |
46 Neutral | $230.35M | -16.52 | -164.67% | ― | -0.23% | 33.15% | |
43 Neutral | $275.80M | -1.58 | 258.06% | ― | 327.60% | -62.19% | |
42 Neutral | $119.44M | -2.41 | -151.55% | ― | -0.16% | 35.72% |
* Technology Sector Average
DUOL
Duolingo
139.24
-146.67
-51.30%
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Duolingo Corporate Events
Business Operations and StrategyFinancial DisclosuresRegulatory Filings and Compliance
Duolingo Addresses Unintended Disclosure of Preliminary User Data
Neutral
Aug 19, 2026
On August 18, 2026, Duolingo disclosed that, during an in‑person investor meeting at its offices, a screen inadvertently showed preliminary internal data suggesting a 27.4% year‑over‑year increase in daily active users for August...
Business Operations and StrategyExecutive/Board Changes
Duolingo Adds Veteran Financial Leader to Board
Positive
Aug 10, 2026
On August 10, 2026, Duolingo’s board expanded from nine to ten directors and appointed veteran financial executive Sallie Krawcheck as an independent Class I director, effective immediately. She also joined the Audit, Risk and Compliance Com...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.