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Duolingo - AI Stock Analysis
Analysis generated September 27, 2025
Duolingo, Inc. (NASDAQ: DUOL) is an American language-learning website and mobile app, as well as a digital language-proficiency assessment exam. The platform offers 106 different courses in 38 languages, with its most popular languages being Spanish, French, and German. Duolingo operates on a freemium model; free services are available, but there is also a premium subscription model called Duolingo Plus, which offers an ad-free experience, offline access, and other benefits.
Fundamental Analysis
Revenue for the last quarter was $252M. This is an increase of 9.33% compared to the previous quarter, which is a positive indicator of growth. Moreover, compared to the same quarter last year, there is an increase of 41.46%, suggesting robust year-over-year growth.
The net income for the last quarter was $45M. This is an increase of 27.45% compared to the previous quarter and an increase of 83.90% compared to the same quarter last year. Both figures indicate strong profitability.
EBITDA for the last quarter was $50M. This represents an increase of 83.53% compared to the previous quarter and an increase of 134.45% compared to the same quarter last year. These numbers suggest considerable improvement in operational efficiency and profitability.
However, the current P/E ratio stands at 127.96. This high P/E ratio may be indicative of overvaluation, which could present a bearish outlook. Additionally, insider selling has been observed in the last couple of months, which may further signal a potential bearish trend.
Technical Analysis
Today's stock price is $326.39, marking a 2.66% increase compared to a month ago and a 17.39% increase compared to a year ago. This suggests a bullish short-term and long-term trend.
The trend is further supported by the SMA10, which is currently at 303.87, higher than the previous SMA10 of 299.14. The increasing SMA10 could be interpreted as a potential upward trend in price movement. However, the RSI stands at 69.4, indicating a neutral condition. This means that the stock is neither oversold nor overbought at this point.
Alternative Data Analysis
Duolingo has 74 open positions, which is up by 57% in the last couple of months. This indicates the company is expanding, potentially a healthy sign. Furthermore, employee sentiment is very high, with an estimated 86% of employees having a positive outlook. This employee sentiment has been trending upward by 8% in the last couple of months.
Regarding customer acquisition, Duolingo has an estimated 56M visitors visiting their webpage. However, the number of visitors has decreased by 7% in the last couple of months, a potentially worrisome trend. On the brighter side, Duolingo has an estimated 350,000 users downloading their mobile apps every day, with app downloads up by 21% in the last couple of months. This suggests an increase in customers.
Concerning customer engagement, Duolingo has 4.6M followers on their Instagram page and 1M followers on their Twitter page. The number of followers on both platforms is down by 0% in the last couple of months, indicating a loss of interest in the company. Lastly, taking into consideration AltIndex's AI score, Duolingo has an AI score of 61, which is a buy signal.
Conclusion and Recommendation
In conclusion, Duolingo presents a mixed but largely positive outlook. Strong revenue and net income growth, along with high EBITDA gains, point to solid financial health and operational efficiency. However, the high P/E ratio suggests that the stock may currently be overvalued. Technical indicators show a bullish trend, further strengthened by an increasing SMA10. Nonetheless, the RSI suggests a neutral stance.
Alternative data shows that while customer web traffic has seen a slight dip, app downloads are rising, and employee sentiment is highly favorable. The AI score of 61 adds a note of optimism with a buy signal.
Based on the analysis of fundamental, technical, and alternative data, the recommendation is to consider Duolingo stock as a favorable investment, but caution should be exercised due to its high P/E ratio and insider selling.
Disclaimer: This AI stock analysis, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current.
