Duolingo

I’m sure at least some of you started learning a language using Duolingo. Their way of learning is almost effortless, and it’s gamified. The app send you notifications to remember to learn a language. They have a product called Duolingo Max, which uses Ai to help people learn a language better. They make the “Duolingo English Test”, which is an exam that is 1/4 the price of an average one. In my opinion, they will keep growing and expand into other subjects in education, e.g: Chemistry, Geography or Science. They are already starting maths, so I think they will grow. However, now let’s look at their financials and debt:

The company has $832.45 million in cash and $53.89 million in debt, so that means that their financials are in a good state. Their Profit Margin is 7.82%, which isn’t that bad. They have been growing earnings at an average of 18% a tear, and are gorecasted to grow their future earnings by 46.4%. is it possible? It’s only a forecast, but I beleive that this company still has lots of growth ahead of them. It’s also the only language learning app that is free to use, as Babbel Rosseta Stone and others are paid. this creates a unique position for them, allowing lots of people to get to know their brand, and also spreading through word-of-mouth advertising. Also, the memes about Duolingo’s bird that wants to shoot you if you don’t do a language lesson help spread the word about them, so that’s a good thing as well.

Look at this net income chart:

As you can see, they have finally started being profitable! That’s good news, so that means they still have plenty of room to grow. I also think that the Ar/Vr headsets will help them as well.

Overall, I think Duolingo is a buy for me, as I think they will greatly benefit from the rise of Ai, and faster computer chips.

Here’s simplywall.st valuation:

Do your own research. This isn’t financial advice.