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Duolingo (NASDAQ:DUOL): Why Wall Street Is Bullish Despite Valuation | 2-Minute Analysis
Seeking Alpha· 2025-12-30 15:00
Core Viewpoint - Duolingo, Inc. is currently rated as a Hold by the Seeking Alpha Quant rating system, while analysts from Seeking Alpha and Wall Street have a Buy rating on the stock, indicating mixed sentiments among different rating systems [2][3]. Company Overview - Duolingo has a market capitalization of $8.6 billion and operates within the consumer discretionary sector, specifically in the education services industry [4]. Valuation Metrics - The company's Valuation grade is currently an F, with a PEG-to-GAAP trailing 12-month ratio of 0.07, significantly lower than the sector average of 0.93. The price-to-cash flow forward ratio stands at 9.84, compared to the sector average of 12.0 [4]. Growth Metrics - Duolingo exhibits strong growth metrics, with a year-over-year revenue growth of 39.86%, far exceeding the sector's growth of 3.5%. The diluted EPS growth is reported at 130.98%, compared to the sector's 5.38% [5]. Profitability Metrics - The company has a Gross profit margin of 71.99%, significantly higher than the sector average of 38.66%. The net income margin is reported at 40.03%, compared to the sector's 4.26% [5]. Momentum Metrics - The stock has faced challenges over the past year, with a share price decline of 44.53%, while the sector has seen a gain of 2.78%. This results in a Momentum grade of F [6]. Revisions Metrics - The Revisions grade is an A, with 17 upward revisions and zero downward revisions for earnings per share over the last three months, and 20 upward revisions and zero downward revisions for revenue in the same period [6]. Analyst Sentiment - Despite the stretched valuation, the strong growth and profitability metrics are keeping some analysts optimistic about Duolingo's future performance [7].