Is DUOL a good stock to buy? We came across a bullish thesis on Duolingo, Inc. on Value & Momentum Portfolio’s Substack. In this article, we will summarize the bulls’ thesis on DUOL. Duolingo, Inc.’s share was trading at $106.61 as of May 25th. DUOL’s trailing and forward P/E were 12.20 and 14.22 respectively according to Yahoo Finance.
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Duolingo, Inc. operates as a mobile learning platform in the United States, the United Kingdom, and internationally. DUOL remains one of the strongest consumer education platforms despite concerns around slowing user growth and rising AI-related costs.
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The company reported Q1 2026 revenue of $292 million alongside an impressive 29% adjusted EBITDA margin, while maintaining a debt-free balance sheet with more than $1 billion in cash. Daily active users increased 21% year-over-year, a slowdown from the 50% growth seen in 2024, but engagement improved meaningfully as users spent more time on the platform and monetization strengthened across international markets, particularly in China.
Management is intentionally reducing subscription friction and removing paywalls, sacrificing roughly $50 million in short-term bookings growth to pursue a long-term target of 100 million DAUs by 2028. While Q2 bookings guidance of 6% growth created investor concerns, the company still expects 10%-12% bookings growth and 15%-18% revenue growth for the full year, supported by expanding AI-driven features, deeper language courses up to professional B2 proficiency, and growing adoption of math and music offerings.
AI investments are temporarily pressuring gross margins due to higher compute costs from features like Video Call and Explain My Answer, but management believes AI-generated content creation efficiencies will strengthen the platform’s competitive moat over time. With over $350 million in expected annual free cash flow, dominant market share, strong retention metrics, and a valuation that has compressed significantly from prior highs, Duolingo appears positioned as a long-term education super-app. The current weakness in the stock could offer substantial upside if user growth re-accelerates and the platform expansion strategy succeeds.
Previously, we covered a bullish thesis on Duolingo, Inc. (DUOL) by Lorenzo Bastianelli in May 2025, which highlighted the company’s viral marketing success, AI-driven content expansion, and accelerating subscriber growth. DUOL’s stock price has depreciated by approximately 78.83% since our coverage. Value & Momentum Portfolio shares a similar view but emphasizes on Duolingo’s transition toward a retention-focused, AI-powered education super-app.
