Duolingo $DUOL Stock Analysis: Speaking Value

Duolingo $DUOL is a battle ground stock – either AI will eradicate its business or Duolingo is here to stay. **Duolingo Growing Revenue Faster Than Industry** The bears point out that the rate of Duolingo growth is deteriorating. Although Duolingo posts higher revenue year after year, the Revenue YoY change is declining. Duolingo’s annual revenue went from 161M in 2021 to 748M in 2025. At the same time, the YoY Revenue growth rate went from 55% in 2022 to 40% in 2025. So, is this underlying revenue growth deterioration a Duolingo only issue or a larger, industry wide trend? I collected data from over 200 companies in the software application industry and see a declining year-over-year revenue trend. The median revenue growth went from 23% in 2021 to 10% in 2025. Duolingo is still growing way faster than the industry at near 40% revenue growth while the industry median is only 10%. Duolingo's daily active users (DAU) continues to grow "approximately 30% year over year and bookings at or slightly above the high end of its previously announced guidance range of $329.5 million - $335.5 million." ([Duolingo Announces CFO Transition - Duolingo, Inc.](https://investors.duolingo.com/news-releases/news-release-details/duolingo-announces-cfo-transition)). **But Duolingo Trades at Discount** We can look at industry average price to sales ratios from NYU and see Education trades at 1.74 and Software Applications at 11 ([Price to Sales Ratios](https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/psdata.html)). Duolingo currently trades at 6.88. |DUOL|GUIDANCE 2025|Education Avg|Software Avg| |:-|:-|:-|:-| |SharesOutstanding|47,101,000||| |StockPrice| $ 150.16||| |Market Cap| $ 7,072,686,160||| |Revenue| $ 1,027,500,000||| |P/S|6.88|1.74|11.01| Source for guidance revenue: [Q3FY25 Duolingo 9-30-25 Shareholder Letter](https://investors.duolingo.com/static-files/c9bf5861-b19d-4396-b060-c0dbeefd34f5) Now we could quickly say Duolingo trades at a significant premium compared to other education companies, but we must remember that DUOL has the growth and expansion not seen in traditional education companies – Duolingo being a technology company enables such high growth – we are paying for Duolingo’s expansive revenue and gross profit growth. Duolingo is also at discount from an EV/EBITDA perspective. |DUOL|GUIDANCE 2025|Education Avg|Software Avg| |:-|:-|:-|:-| |Adjusted EBITDA| $ 296,900,000||| |P/EBITDA|23.82||| |EV| $ 5,900,000,000||| |EV/EBITDA|19.87|9.26|24.48| Sources for guidance adjusted EBITDA: [Q3FY25 Duolingo 9-30-25 Shareholder Letter](https://investors.duolingo.com/static-files/c9bf5861-b19d-4396-b060-c0dbeefd34f5) Source for Education and Software industry average EV/EBITDA: [Value to Operating Income](https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/vebitda.html) Sometimes value is found in stocks that many seem to not want to own - when the narrative is overly negative while the numbers do not show bad omens. I have a buy rating on Duolingo $DUOL. Not financial advice.