Group 1 - The article discusses the investment potential of Duolingo, highlighting its growth and market position [1] - It emphasizes the company's unique offerings in the language learning sector, which differentiate it from competitors [1] - The article suggests that Duolingo's innovative approach and user engagement strategies contribute to its strong performance [1] Group 2 - The Motley Fool recommends Duolingo as a promising investment opportunity [1] - The article notes that the author, Parkev Tatevosian, has no personal investment in the stocks mentioned, ensuring an unbiased perspective [1] - It mentions the potential for financial compensation for promoting services, indicating a business relationship with The Motley Fool [1]

Core Insights - The rise of artificial intelligence (AI) is significantly transforming the business landscape, with companies adding trillions of dollars to their valuations based on AI prospects [1] - Duolingo is effectively leveraging AI to enhance its platform and operations, positioning itself well in the education sector [3][4] Company Overview - Duolingo has utilized affordable smartphones to build a global language learning business through its app [3] - The company is integrating AI to create hyper-personalized learning experiences, improving user engagement and outcomes [4][5] Operational Efficiency - AI is enhancing Duolingo's operational efficiency by enabling the rapid and cost-effective creation of high-quality content [6] - Generative AI is a key feature of Duolingo Max, the company's premium subscription tier, which has expanded to 27 countries and accounts for 15% of daily active users as of Q2 2024 [6] User Growth - Duolingo has experienced impressive user growth, with daily active users and paid subscribers increasing by 54% and 47% respectively in Q3 2024 [7] - The company's net income rose significantly from $2.8 million a year ago to $23.4 million in the most recent quarter [7] Future Opportunities - Duolingo is exploring significant opportunities in conversational AI for immersive learning, including a new Video Call feature for premium subscribers [9] - The company is also targeting enterprise customers through its "Duolingo for Business" program, with plans for international expansion [10][11] Investment Outlook - Duolingo's revenue has grown by over 40% in recent quarters, and its prospects appear promising as it continues to leverage AI for business growth [12]

Company Performance - Duolingo, Inc. (DUOL) closed at $363.28, reflecting a +1.34% change from the previous trading day's closing, outperforming the S&P 500's daily gain of 0.53% [1] - The stock has increased by 10.56% over the past month, significantly surpassing the Business Services sector's gain of 3.28% and the S&P 500's gain of 1.24% [1] Upcoming Earnings - Analysts expect Duolingo, Inc. to report earnings of $0.50 per share, indicating a year-over-year growth of 92.31% [2] - The consensus estimate for quarterly revenue is $205.27 million, representing a 35.95% increase from the same period last year [2] Analyst Estimates - Recent changes to analyst estimates for Duolingo, Inc. suggest a favorable outlook on the company's business health and profitability [3] - Modifications in estimates are often correlated with impending stock price performance, indicating potential investment opportunities [4] Valuation Metrics - Duolingo, Inc. has a Forward P/E ratio of 118.14, which is significantly higher than its industry's Forward P/E of 23.71 [6] - The Technology Services industry, part of the Business Services sector, currently holds a Zacks Industry Rank of 87, placing it in the top 35% of over 250 industries [6] Zacks Rank - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), shows that Duolingo, Inc. currently holds a Zacks Rank of 3 (Hold) [5] - The Zacks Consensus EPS estimate has decreased by 0.46% in the past month, indicating a slight adjustment in expectations [5]

Core Insights - Duolingo, Inc. will announce its fourth quarter and full year results for 2024 on February 27, 2025, after the U.S. market closes [1] - A live video webcast of the announcement will be available to the public on Duolingo's Investor Relations website [2] Company Overview - Duolingo is recognized as the leading mobile learning platform globally, with its app being the most popular method for language learning and the top-grossing app in the Education category on both Google Play and the Apple App Store [3] - The company focuses on technology to enhance the learning experience, aiming to provide an engaging and effective educational platform while striving to make quality education universally accessible [3]

Core Insights - Duolingo, Inc. will announce its fourth quarter and full year results for 2024 on February 27, 2025, after the U.S. market closes [1] - A live video webcast will be held at 5:30 p.m. ET on the same day, accessible through Duolingo's Investor Relations website [2] - Duolingo is recognized as the leading mobile learning platform globally, with its app being the most popular for language learning and the top-grossing app in the Education category on major app stores [3] Company Overview - Duolingo's mission is to provide the best education in the world and make it universally available, focusing on a fun, engaging, and effective learning experience [3] - The company has consistently invested in technology to enhance its learning platform [3]

Investment Rating - The report maintains a "Buy" rating for Duolingo (DUOL US) with a target price of USD 400, implying a potential upside of 17% from the current price of USD 341 8 [2][8] Core View - Duolingo is benefiting from a surge in Chinese language learning in the US, driven by the "TikTok Refugee" phenomenon, with Mandarin learners increasing by 216% YoY from December 1, 2024, to January 13, 2025 [1] - The company's innovative gamified language learning model has significantly lowered user barriers, covering over 40 languages and targeting a global market of over 2 billion foreign language learners with a current penetration rate of less than 6% [8] - Duolingo is expected to achieve 1 76 billion MAUs by 2026, with a CAGR of 30%, and paid subscribers are projected to reach 15 6 million by 2026, growing at a CAGR of 33% [8] Financial Performance and Forecasts - Revenue is forecasted to grow from USD 369 million in FY22 to USD 1,218 million in FY26E, with a CAGR of 34 7% [2][9] - Operating profit is expected to turn positive in FY24E at USD 66 million, increasing to USD 196 million by FY26E [2][9] - Net income is projected to rise from USD 16 million in FY22 to USD 390 million in FY26E, with a significant improvement in profitability [2][9] - Adjusted EBITDA is forecasted to grow from USD 16 million in FY22 to USD 390 million in FY26E, with an EBITDA margin of 24 4% in 4Q24 [8][9] User Metrics and Growth - MAUs are expected to reach 115 million in 4Q24, a 30% YoY increase, with DAUs nearing 40 million [8] - Paid subscription users stood at 8 6 million in 3Q24, with a paid rate of 7 6%, and are expected to grow to 15 6 million by 2026 [8] Valuation Metrics - The target EV/EBITDA multiples are 88 3x for FY24E, 60 0x for FY25E, and 42 9x for FY26E [2][9] - The target P/E multiples are 68x for FY25E and 52x for FY26E [8] Market Context - Duolingo's stock price has shown strong performance, with a 52-week range of USD 145 05 to USD 378 48, and a current market cap of USD 15,034 million [2] - The company's stock has outperformed the S&P 500 index significantly over the past year [6]

Group 1 - Duolingo shares increased nearly 7% due to a significant rise in users learning Mandarin, with a 216% increase in Mandarin learners compared to the previous year, while Spanish learners grew by 40% in the same period [1][4] - RedNote, a Chinese social media app, has become the No. 1 free app on the Apple App Store, contributing to the surge in Duolingo's Mandarin learners [2] - The U.S. user exodus from TikTok has benefited RedNote, which saw a 20-fold increase in U.S. app downloads over the last week [4] Group 2 - Duolingo offers courses in 42 languages, with 48.8 million Spanish learners, 27.3 million French learners, and 10.7 million Chinese learners [4] - Duolingo's shares rose by 43% last year, outperforming the Nasdaq's 29% gain [5]

Core Insights - Duolingo has expanded its Video Call feature to Android devices and added five new languages, enhancing its AI conversation partner for language learning [1][3] - The AI tool allows Duolingo Max subscribers to engage in realistic conversations, providing a personalized experience tailored to individual skill levels [2][3] - The Video Call feature is now available for learners of English, Spanish, French, German, Italian, Portuguese, Japanese, and Korean, with ongoing enhancements planned [3][4] Company Overview - Duolingo is recognized as the leading mobile learning platform globally, with its app being the most popular and top-grossing in the Education category on major app stores [5] - The company focuses on leveraging technology to create engaging and effective learning experiences while aiming to make quality education universally accessible [5] Feature Enhancements - Recent enhancements to the Video Call feature include expressive animations for the character Lily, conversation transcripts for review, and occasional calls from Lily to encourage regular practice [6]

Company Performance - Duolingo, Inc. (DUOL) closed at $316.38, reflecting a -0.72% change from the previous trading day's closing, underperforming compared to the S&P 500's daily gain of 0.16% [1] - The company's shares have decreased by 5.74% over the last month, which is worse than the Business Services sector's loss of 5.61% and the S&P 500's loss of 2.2% [1] Upcoming Earnings - Duolingo, Inc. is expected to report an EPS of $0.49, representing an increase of 88.46% from the prior-year quarter [2] - The consensus estimate for revenue is $204.66 million, which is up 35.54% from the prior-year quarter [2] Analyst Estimates - Recent adjustments to analyst estimates for Duolingo, Inc. indicate changing near-term business trends, with positive revisions suggesting a favorable outlook on the company's health and profitability [3] Zacks Rank and Valuation - The Zacks Rank system currently rates Duolingo, Inc. as 2 (Buy), with an average annual return of +25% for 1 stocks since 1988 [5] - The Forward P/E ratio for Duolingo, Inc. is 104.54, significantly higher than the industry average of 23.65, indicating that the company is trading at a premium [6] Industry Context - The Technology Services industry, part of the Business Services sector, has a Zacks Industry Rank of 75, placing it in the top 30% of over 250 industries [6] - The Zacks Industry Rank measures the strength of industry groups, with the top 50% rated industries outperforming the bottom half by a factor of 2 to 1 [7]

Group 1 - Duolingo, Inc. (DUOL) is part of the Business Services group, which consists of 305 companies and ranks 4 in the Zacks Sector Rank [2] - The Zacks Rank system focuses on earnings estimates and revisions, with DUOL currently holding a Zacks Rank of 2 (Buy) and a 8.2% increase in full-year earnings estimates over the past 90 days [3] - DUOL has achieved a year-to-date return of approximately 46.9%, significantly outperforming the average 22% gain of Business Services stocks [4] Group 2 - Duolingo, Inc. is categorized under the Technology Services industry, which includes 162 companies and currently ranks 55 in the Zacks Industry Rank [6] - Stocks in the Technology Services industry have gained about 55.3% year-to-date, indicating that DUOL is slightly underperforming its industry peers [6] - AppLovin (APP), another stock in the Business Services sector, has shown exceptional performance with a year-to-date return of 741.1% and a Zacks Rank of 1 (Strong Buy) [4][5]