Skillsoft vs. Duolingo: Which EdTech Stock Is a Smarter Bet Today?

Both Skillsoft SKIL and Duolingo DUOL navigate through the digital education space, providing online learning platforms that monetize via subscriptions and enterprise solutions. Long-term shifts toward remote work, app-based learning and workforce-targeted learning are among the factors that position these companies at the forefront of the rising demand for digital education.

Let us conduct a comparative analysis to determine which of these two companies offers a better value for investors.

SKIL: AI Evolution Through Percipio Amid GK Friction

Skillsoft’s drive to become an AI-first skill-management organization is vested in the success of its Percipio platform. The company is addressing the growing need among enterprises for a stronger link between learning, skills development and business performance by introducing a next-gen Skillsoft Percipio platform. Identifying the evolving priorities for workforce readiness, SKIL is combining skill intelligence, mapping and measurement, and cultivating Percipio’s identity as an indispensable asset for businesses to improve employee learning.

The company is repositioning Percipio, leveraging CAISY, LX Design Studio and agentic AI capabilities, which are vital to generating tailored content faster than traditional means and using agentic AI to manage human employees and AI agents. Positive impacts are being witnessed in the form of a 74% year-over-year upsurge in AI learner bases and 158% whopping growth in AI learning hours. A 99%-dollar retention rate for talent development solutions is a result of Percipio’s demand, which is the primary catalyst for generating recurring revenues and improving customer retention.

The company registered a 2.4% year-over-year dip in content and software development expenses, a 7.1% decline in selling and marketing expenses, and a 11.9% decrease in general and administrative expenses on the back of AI. While SKIL managed to lower expenses, the growth trajectory was highly turbulent. In the third quarter of fiscal 2026, the top line plummeted 6% year over year due to the degradation in the global knowledge (GK) segment.

Management came up with a solution to enforce a strategic review to find an alternative for the GK segment. While this strategy could potentially benefit revenues in the long term, it cannot be guaranteed. The inefficiency of the GK segment translated to a 130-basis-point year-over-year dip in the adjusted EBITDA margin, urging investors to question the efficiency of its business model.

DUOL: Focus on Scalability While Virality Lacks

Duolingo’s presence in the digital education domain is deeply rooted in its ability to leverage AI and proprietary learner data. While companies view AI as a long-term aspiration, DUOL incorporates it at the core of its business model, from content creation to cost optimization, making it a product and financial growth driver. In the fourth quarter of 2025, Duolingo witnessed a 30% year-over-year rise in daily active users (DAU) and 28% growth in paid subscribers, highlighting rising demand among users.

While the user growth trajectory appears optimistic, the 2026 outlook raises an immediate red flag. Management expects the company to register a 11% year-over-year rise in bookings in 2026. While this momentum might appeal to some investors, we must acknowledge that this growth rate is a sharp decline from the 33% logged in 2025. It clearly signals a loss of momentum, which might be frowned upon for a high-growth tech stock.

Margin compression could create an air of caution among investors. Management disclosed the plan to prioritize user growth over short-term financial gains, which it aims to achieve via increasing R&D and marketing spend. The immediate impact must fall on DUOL’s margins, as evidenced by a dip in the adjusted EBITDA margin expectations to 25% for 2026 from the 29.5% reported in 2025. Investors might lean on consistent profitability rather than expected scalability if the cost of capital rises on the back of higher interest rates.

The company is bearing the pain of a lack of virality. The recent earnings call reveals that Duolingo is unable to achieve record-breaking virality in TikTok due to dynamic algorithms. The path from witnessing a high level of virality to a lack of hitting those extremes can affect the company’s DAU growth, hampering its growth trajectory.

How Do Estimates Compare for SKIL & DUOL?

The Zacks Consensus Estimate for Duolingo’s fiscal 2026 sales is pegged at $512.2 million, a 3.6% dip from the preceding year’s actual. The consensus mark for EPS is set at $4.17, declining 3.7% year over year. There has been no change in analyst estimates or revisions lately.

The Zacks Consensus Estimate for Duolingo’s 2026 sales is pinned at $1.2 billion, up 20.5% year over year. For EPS, the consensus mark is kept at $4.01, plummeting 52.1% year over year. Three EPS estimates have moved southward versus no northbound revision.

SKIL Presents an Attractive Valuation Than DUOL

Skillsoft is trading at a 12-month forward price-to-earnings ratio of 0.96, which is lower than its 12-month median of 2.82. Duolingo’s 12-month forward price-to-earnings ratio is 28.06, below its 12-month median of 81.13. SKIL trades at a lower price than DUOL, making it more appealing to investors.

P/E - F12M

Verdict: Skillsoft Provides an Upside

Both SKIL and DUOL are striving to gain an edge in the digital education space, banking on AI. Skillsoft presents a deep-value proposition and successful pivot into an AI-first model, while Duolingo serves as a case of caution due to the lack of optimistic prospects for 2026. SKIL is trading at a P/E of 0.96X, backed by Percipio and a strategic split from the GK segment.

Conversely, Duolingo expects its bookings growth rate to take a hit, along with its adjusted EBITDA margin, waving red flags to investors. Therefore, we find Skillsoft to provide an upside to investors while Duolingo’s premium valuation of 28.06X raises the difficulty to justify the declining prospects for 2026, prompting investors to square off their positions.

SKIL carries a Zacks Rank #3 (Hold), while Duolingo has a Zacks Rank #4 (Sell) at present.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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