2024-03-22 23:14:46 ET
Summary
- Duolingo's share price has increased by over 70% in the past year, driven by its aggressive product expansion and strong bookings trends.
- The company has a large global market of language learners and multiple routes to monetization, including subscriptions, advertising, and in-app purchases.
- However, Duolingo already trades at a very rich ~13x revenue multiple, which leaves very little room for multiple expansion.
- Stronger subscriber trends have made me more optimistic on the company's prospects, but I'm still skeptical of the company's ability to keep rallying from current levels.
So far over the past year, the majority of the big rallies in the tech sector have been in the enterprise segment. Duolingo ( DUOL ), meanwhile, has been a massive outlier amid consumer technology products that has managed to stoke impressive investor enthusiasm driven by its aggressive product portfolio expansion and strong bookings rates....
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For further details see:
Duolingo: Caution Is The Best Approach Here (Rating Upgrade)