Duolingo, Inc. (DUOL): A Bull Case Theory

We came across a bullish thesis on Duolingo, Inc. on Stock Analysis Compilation’s Substack. In this article, we will summarize the bulls’ thesis on DUOL. Duolingo, Inc.'s share was trading at $359.79 as of July 23^rd. DUOL’s trailing and forward P/E were 177.24 and 126.58, respectively according to Yahoo Finance.

Duolingo, a leading global online language-learning platform, has built a strong competitive position through its gamified approach and robust unit economics. Its app-centric model leverages machine learning and a massive base of monthly users with extensive daily tracking to continually personalize and improve learning experiences. Subscriptions remain the primary revenue driver, with significant growth opportunities ahead as the company expands the penetration of Duolingo Max, its premium AI-enabled tier.

Global demand for English learning continues to rise, providing a substantial runway for user growth, while future price increases offer additional monetization upside. Duolingo has also diversified into adjacent categories with products like Duolingo ABC, targeting early childhood education. The company’s unique product design and expanding ecosystem reinforce user engagement and retention, underpinning its long-term growth profile.

Recent market volatility created an attractive entry point, allowing for a timely position initiation. This has already been validated by Duolingo’s strong financial performance, highlighted by 38% year-over-year revenue growth in the latest quarter. With its combination of high user engagement, expanding premium offerings, global scalability, and continued innovation, Duolingo remains well positioned to compound growth, offering investors an appealing mix of defensibility and upside potential.

Previously we covered a bullish thesis on Duolingo, Inc. (DUOL) by Lorenzo Bastianelli in May 2025, highlighting the “Dead Duo” campaign, surging MAUs, and expansion into new learning verticals. The company’s stock price has depreciated about 28.6% since then due to valuation compression. The thesis holds as engagement and AI-driven growth remain intact. Stock Analysis Compilation shares a similar view but stresses Duolingo Max monetization.

Duolingo, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 51 hedge fund portfolios held DUOL at the end of the first quarter which was 52 in the previous quarter. While we acknowledge the potential of DUOL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.