Is DUOL a good stock to buy? We find a bullish thesis on Duolingo, Inc. in the Value & Momentum Portfolio Substack. In this article we will summarize the bulls thesis on DUOL. Duolingo, Inc. stock was trading at $106.61 on May 25.th. 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 about slowing user growth and rising AI-related costs.
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The company reported Q1 2026 revenue of $292 million along with an impressive adjusted EBITDA margin of 29%, while maintaining a debt-free balance sheet with over $1 billion in cash. Daily active users increased 21% year over year, a slowdown from the 50% growth seen in 2024, but engagement improved significantly as users spent more time on the platform and monetization strengthened in international markets, particularly China.
Management is intentionally reducing friction with subscriptions and removing paywalls, sacrificing approximately $50 million in near-term bookings growth to pursue a long-term goal of 100 million DAU by 2028. While Q2 bookings guidance of 6% growth created concerns for investors, the company still expects bookings growth of 10% to 12% and revenue growth of 15% to 18% for all year round, supported by the expansion of AI-powered features and deeper language courses up to the B2 professional level. competition and the growing adoption of math and music offerings.
Investments in AI are temporarily putting pressure on gross margins due to higher computing costs for features like Video Call and Explain My Answer, but management believes efficiencies in creating AI-generated content will strengthen the platform’s competitive moat over time. With more than $350 million in expected annual free cash flow, dominant market share, strong retention metrics, and a valuation that has compressed significantly from previous highs, Duolingo appears positioned as a long-term educational super app. The stock’s current weakness could offer substantial upside if user growth accelerates again and the platform’s expansion strategy is successful.
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. The DUOL share price has depreciated by approximately 78.83% since our coverage. Value & Momentum Portfolio shares a similar vision, but emphasizes Duolingo’s transition into an AI-powered, retention-focused educational super app.