Is Duolingo, Inc. (DUOL) overvalued or undervalued?
Updated Nov 10, 2026 · hand-researched model · educational, not advice
At a recent price of $154.25, Duolingo, Inc. (DUOL) trades 77% above TickerWorth's blended fair value of $87.02 per share — a discounted-cash-flow model cross-checked against peer multiples and asset value — meaning the market currently prices DUOL overvalued vs our estimate of what the business is intrinsically worth. Our fair value sits below the market, an implied -43.6% move to close the gap if the business performs in line with our assumptions. This is an educational model, not a price target or a recommendation — the value moves with the inputs, which you can test yourself using the WACC slider below.
One of the lenses behind that blended figure is a discounted-cash-flow model, which on its own values DUOL at about $70.73 per share. The rest of this page walks through that DCF — its assumptions, reverse-DCF and discount-rate sensitivity — because it is the auditable anchor of the blend.
The valuation discounts Duolingo, Inc.'s projected free cash flows at a weighted-average cost of capital (WACC) of 12.1%, with a long-run terminal growth rate of 2.5%. About 70% of the enterprise value comes from the terminal value — the portion beyond the explicit forecast window — which is typical for a stable, cash-generative business and a reminder that small changes in the discount rate or terminal growth assumption swing the intrinsic value meaningfully.
Running the DCF in reverse — solving for the growth the current price already assumes — DUOL would need sustained revenue growth of more than 25%/yr to justify today's price, against about 13.9% a year compounded in our base case. We don't quote a precise figure here, because past about 25% a year the reverse-DCF stops being informative: it solves for revenue growth alone, holding margins, capital intensity and the forecast horizon fixed, so a price well above our fair value has nowhere to go but growth. The honest reading is that the price implies growth this model can't reconcile — not that we forecast it.
Sensitivity matters more than any single number. Across a reasonable band of discount-rate assumptions, DUOL's modeled DCF value ranges from about $62.61 to $84.51 per share. If that range still sits below today's price, the market is optimistic relative to the model across the whole band; if it brackets the price, the stock is roughly fairly valued on our assumptions. Use the interactive slider to see exactly where your own cost-of-capital view lands.
How to read this page: the DCF fair value is what Duolingo, Inc. would be worth if its cash flows grow as modeled and are discounted at the stated WACC. The assumptions table shows every input and its source; the reverse-DCF shows what the market believes; the sensitivity band shows how fragile the answer is. None of this is investment advice — it is a transparent, auditable framework for forming your own view of DUOL's intrinsic value. Figures update as new filings and prices come in.
The assumptions behind DUOL's DCF
| Input | Value | Source |
|---|---|---|
| Base-year revenue | $1,037,589,000 | FY2025 Form 10-K (filed 2026-02-27) — Consolidated Statements of Operations and Note: Revenue from Contracts with Customers: Total revenue $1,037,589K, up 38.7% on FY2024's $748,024K (FY2023: $531,109K). The filed mix: subscription revenue $873,442K (84.2% — Super/Family/Max plans, recognized ratably over the subscription term) and other revenue $164,147K (advertising $79,725K, Duolingo English Test $42,006K, in-app purchases $40,479K, other $1,937K). One operating segment by the company's own accounting. Three processors handled 95.3% of FY2025 revenue: Apple 61.6%, Google 23.4%, Stripe 10.3% — the app-store toll (generally 15-30% of in-app payments, per the 10-K's risk factors) sits inside cost of revenues and is a structural feature of this base year, not an adjustment to it. |
| Base EBIT margin | 13.1% | FY2025 Form 10-K (filed 2026-02-27) — Consolidated Statements of Operations: Income from operations $135,570K / revenue $1,037,589K = 13.07%. The build: gross profit $749,457K (72.2% — cost of revenues is mostly app-store fees, hosting/AI inference and content), less R&D $306,323K (29.5% of revenue), sales & marketing $125,677K (12.1%) and G&A $181,887K (17.5%). This GAAP margin carries the full stock-compensation load of $137,437K (13.2% of revenue) inside it — nothing is added back anywhere in this model. The filed path: 9.1% (FY2023), 13.2% (FY2024), 13.1% (FY2025); the nine months to 2026-09-30 printed 11.4% ($102,668K on $899,428K, Q3 2026 10-Q), including an $11.4M one-quarter bonus accrual that pays out only if Q4 user growth reaches 25%. |
| Forecast revenue growth | 18% → 16% → 14% → 12% → 10% | Assumption — TickerWorth's 5-year explicit forecast |
| Risk-free rate | 5.2% | FRED DGS10 — 10-year US Treasury constant maturity yield: Shared house input: the same 5.24% used by every researched model in this tracker, held so values stay comparable across companies. The current FRED print is lower (~4.96% in late October); refreshing it for Duolingo alone would break comparability — it is a tracker-wide update, flagged here rather than smuggled into one company's model. |
| Beta | 1.37 | Assumption — Own regressions of DUOL on the S&P 500 from Yahoo daily/weekly/monthly price history (pulled 2026-11-04): Measured here against the S&P 500 from Yahoo price history: 1.03 (5Y monthly, n=60 — the window reaches back to the 2021 IPO and the 2022 drawdown, when DUOL fell with, not against, a falling market), 1.38 (3Y monthly), 1.53 (2Y weekly), 1.37 (1Y weekly), 1.33 (2Y daily). The value used, 1.37, is the median of the five windows, on the house method (the APP and TSLA files use the same five-window median). No shrink is applied: the four shorter windows cluster at 1.33-1.53 and describe the same company — a consumer-subscription stock that lost roughly three-quarters of its value from its 2025 high to the $128.00 close on 2026-11-03, then rose ~32% the next day. Each 0.1 of beta here is worth about $2.30 a share (beta 1.27 prints $73.17, beta 1.47 prints $68.53); at a beta of 1.0 the value would be $81.35. |
| Terminal growth | 2.5% | Assumption — House default — long-run nominal growth ceiling applied across the tracker: Shared house input (2.5%), identical in every researched model in this tracker. |
| Diluted shares | 50M | Q3 2026 Form 10-Q (filed 2026-11-04) — Note: Net Income Per Share (weighted-average shares): Weighted-average DILUTED shares for Q3 2026: 49,930K (nine months: 49,840K) — the house convention (the META, NVDA and APP models also divide by the weighted diluted count). The build: basic weighted shares 46,879K plus dilutive RSUs 2,638K plus dilutive options 413K. For reference, the census at 2026-09-30 was 47,107K shares outstanding (Class A 40,708K + Class B 6,399K; the two classes are economically identical — Class B carries 20 votes per share, converts 1:1 into Class A, and there is no preferred or tracking stock to bridge). Dividing by the census instead would print about 6% higher. The count is roughly flat year over year despite $76,455K of first-ever buybacks in 9M 2026, because equity grants dilute 3.5-4.0% a year before repurchases (shareholder letter) — this static denominator takes no credit for future buybacks. |
| Market price | $154.25 | Delayed quote · as of 2026-11-10 05:38 UTC |
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Most undervalued stocks (per our valuation) · Undervalued Consumer stocks · All valued stocks · Interactive DUOL valuation & downloadable modelTickerWorth is an educational DCF tool, not a licensed investment adviser. Figures are estimates derived from public filings and market data and can be wrong.