ZACKS·2025-12-23 16:21Core Insights - AppLovin (APP) and Duolingo (DUOL) are gaining strong investor interest due to their growth-focused strategies in the mobile technology and digital education sectors respectively [1][2] AppLovin (APP) - AppLovin is transitioning from a mobile-first ad platform to a diversified advertising powerhouse, bolstered by its acquisition of Wurl, which enhances its capabilities in connected TV (CTV) advertising [3][4] - The CTV market is rapidly growing, and Wurl's infrastructure allows AppLovin to deliver targeted ad campaigns across CTV devices, enhancing its predictive advertising capabilities [4][5] - AppLovin's Q3 revenues reached $1.41 billion, a 68% increase year over year, with adjusted EBITDA growing 79% to $1.16 billion, resulting in an 82% margin [6][7] - Free cash flow surged 92% year over year to $1.05 billion, enabling significant share repurchases and an expanded repurchase authorization of $3.2 billion, reflecting confidence in financial stability [7] - For Q4, AppLovin expects revenues between $1.57 billion and $1.6 billion, indicating 12% to 14% sequential growth, with adjusted EBITDA projected between $1.29 billion and $1.32 billion [8] Duolingo (DUOL) - Duolingo leverages artificial intelligence and proprietary learner data to scale its language courses rapidly, positioning itself as a leader in digital education [9][10] - The company has introduced 148 new language courses in April, showcasing its ability to scale content creation significantly, which reinforces its brand leadership [12] - Duolingo's current ratio stands at 2.82, indicating strong liquidity and the ability to meet short-term obligations [14] - The Zacks Consensus Estimate for Duolingo's 2025 sales indicates year-over-year growth of 38%, with EPS growth projected at 344% [18] - Duolingo's valuation is more attractive than AppLovin's, trading at a forward sales multiple of 6.88, compared to AppLovin's 32.35, suggesting that Duolingo's long-term potential is underappreciated [21][22]