Duolingo Inc. Class A Common Stock (DUOL)

FairStock Score: 85/100 — HIGH CONVICTION

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

At $140.10 on 2026-10-13, Duolingo carries a $7.0B market cap. The business is real: in fiscal 2025, the period ended 2025-12-31, revenue was $1.0B and net income was $414.1M, or diluted EPS of $8.57. But that profit includes fiscal Q3 2025, the quarter ended 2025-09-30, when net income was $292.2M on revenue of $271.7M—far above fiscal Q2 2026, the quarter ended 2026-06-30, when revenue was $298.5M and net income was only $33.2M. So I would not treat FairStock's P/E of 16.56 as normalized earnings power. The balance sheet is strong: FairStock shows debt-to-equity of 0.06 and an Altman Z-score of 7.35. Free cash flow is $397.5M, a 5.7% FCF yield. Revenue growth is 26.53%, and the platform has 250 language courses and a global brand—some network effect, though not an unassailable toll bridge. Still, FairStock's ROCE is only 5.64%, and the Graham Number is $75.78, giving a -84.88% margin of safety at this price, meaning the stock is expensive by conservative asset-and-earnings tests. FairStock's PEG of 0.70 looks attractive if growth persists, but EV/EBITDA of 34.21 and P/B of 4.64 demand durable compounding. Piotroski is 7/9, and FairStock classifies it as a TURNAROUND—returned to profit after a loss within three years. I would want normalized earnings and margins before calling it a bargain.

In plain English: Duolingo makes a popular app for learning languages, with 250 courses and an English test. The business looks strong: revenue is growing, it is profitable, and it has plenty of cash and little debt. But at $140.10, the stock looks expensive by simple asset-and-profit yardsticks, even though cash flow is solid.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer