Duolingo (DUOL) AI Stock Analysis

Duolingo

(BMV:DUOL)

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Action:N/A

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Positive Factors

Scalable growth and profitabilityDuolingo has combined substantial revenue expansion with consistently high gross margins and a clear move into profitability. That combination indicates scalable digital economics, supports continued investment in product quality and user acquisition, and can strengthen earnings durability over the next several quarters.

Negative Factors

Monetization lags user growthStrong engagement is not translating into bookings at the same pace, creating a conversion lag between audience growth and revenue growth. If this persists, Duolingo may need longer investment periods before realizing returns, making near-term monetization and revenue productivity less predictable.

Duolingo (DUOL) vs. SPDR S&P 500 ETF (SPY)

Market Cap: MXN 6.30B
Dividend Yield: ―
Average Volume (3M): 191
Price to Earnings (P/E): 15.2
Beta (1Y): 0.92
Revenue Growth: 17.53%
EPS Growth: 218.34%
Country: Mexico
Employees: 900
Sector: Technology
Sector Strength: 61
Industry: Software - Application

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 pro...

Duolingo Earnings Call Summary

Earnings Call Date:Aug 04, 2026(Q2-2026)|% Change Since:6.52%|Next Earnings Date:Nov 02, 2026

Earnings Call SentimentPositive

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.

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 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

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

MX:DUOL against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
YALA	74Outperform	$839.76M	6.11	16.63%	―	-3.75%	-3.09%
API	67Neutral	$410.51M	34.92	1.96%	―	13.62%	―
Sector *	61Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
GLOO	53Neutral	$268.19M	-1.69	1005.30%	―	275.45%	-5.70%
KLTR	48Neutral	$221.20M	-16.74	-164.67%	―	-0.23%	33.15%
NRDY	40Underperform	$80.35M	-1.68	-151.55%	―	-0.16%	35.72%

* Technology Sector Average

Performance Comparison

MX:DUOL and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
MX:DUOL	Duolingo, Inc. Class A	2450.00	-2426.00	-49.75%
API	Agora, Inc.	4.33	1.05	32.01%
YALA	Yalla Group Limited	5.50	-1.88	-25.47%
NRDY	Nerdy	6.23	-8.23	-56.92%
KLTR	Kaltura, Inc.	1.50	0.00	0.00%
GLOO	Gloo Holdings, Inc. Class A	2.87	-5.23	-64.57%

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.

Duolingo AI Stock Analysis