Duolingo stock analysis. DUOL stock.
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I think it’s worth taking a look at Duolingo because its one of the best performing stocks this year, gaining over 90%.
The company helps people learn languages through its app and its got a successful marketing strategy via social media channels like Instagram and TikTok where it has over 6 million followers.
Based on the current share price, the company has a market cap of 5.6 billion dollars. With 600 million of cash and no debt the enterprise value is roughly 5 billion.
Revenue sits at 370 million over the last 12 months but the company is not yet profitable reporting minus 60 million in net income. Free cash flow is positive at 48 million and stock based compensation is also significant at 20% of sales.
However, the story with Duolingo is rapid revenue growth. Revenues have grown from just 71 million in 2019 to 370 million today, an increase of 5x.
Gross margins are good too, increasing from 71% in 2019 to 73% today.
Duolingo can also be proud of the positive impact it’s having. The app has over 500 million users, 37 million of which pay to improve their language skills. Compare that to Pinterest which has a similar audience and is valued at 18 billion.
Key to the success of Duolingo is it’s gamified approach to learning. And there’s no doubt the company can expand its offering to incorporate more subjects such as mathematics, physics and more.
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