SYM vs. DUOL: Which Technology Services Stock Has an Edge Right Now?

Core Insights - Symbotic (SYM) and Duolingo (DUOL) are prominent players in the Zacks Technology Services industry, with SYM focusing on supply chain robotics and DUOL on mobile language learning [1][2] Symbotic (SYM) - SYM has a significant backlog of $22.4 billion, positioning it for substantial revenue generation in the near future [4] - The company expects to recognize nearly 11% of its remaining performance obligations as revenues in the next 12 months and 56% in the following 13-60 months [4] - Revenues increased by 26% year over year, with expectations for Q4 revenues in the range of $590-$610 million and adjusted EBITDA between $45-$49 million [5][10] - SYM's partnership with Walmart is crucial, contributing significantly to its revenues, but also introduces customer concentration risks [7] - SYM has a history of negative earnings surprises, with an average negative surprise of 78.3% over the trailing four quarters [6] Duolingo (DUOL) - DUOL leverages AI to personalize learning experiences and has integrated OpenAI's large language models for content creation [8][9] - The company has raised its full-year outlook due to lower-than-expected AI-related expenses, with a gross margin of 72.4% [11] - DUOL launched 148 new language courses in April, showcasing its ability to rapidly expand content offerings [11] - Paid subscribers increased by 37% year over year, contributing to a 41% revenue growth and a 65.4% earnings surprise in Q2 [12][13] - DUOL has a robust liquidity position with a current ratio of 2.81, indicating strong short-term financial health [13] Valuation Comparison - Both SYM and DUOL appear overvalued compared to the technology services industry based on the price-to-sales ratio, but SYM's valuation is higher than DUOL's [14] Conclusion - DUOL is viewed as a more favorable investment compared to SYM, supported by its strong AI integration, diverse revenue streams, and solid liquidity position [19][18]