David Gardner Analyzes Risk Rating System
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4d ago
0mins
Should l Buy DUOL?
Source: Fool
- Risk Rating System Overview: David Gardner introduces his 25-point risk rating system, used for over a decade, aimed at replacing vague risk labels with concrete, quantifiable numbers to help investors better understand investment risks.
- Case Studies: During the discussion of Etsy and Duolingo, analysts scored each company on profitability, cash flow, and brand recognition, noting that Etsy achieved $182 million in net income over the past 12 months, while Duolingo reached approximately $386 million.
- Market Competition Analysis: Etsy faces pressure from competitors like Amazon and Shopify, although it retains some brand influence in the crafts market; Duolingo, on the other hand, leads the language learning market with over 50% brand awareness.
- Future Outlook: Analysts believe that while Etsy's market performance has declined, its investments in AI and other technologies could serve as positive catalysts in the future, whereas Duolingo must be wary of potential threats from AI to its business model.
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Analyst Views on DUOL
Wall Street analysts forecast DUOL stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for DUOL is 260.36 USD with a low forecast of 160.00 USD and a high forecast of 330.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
17 Analyst Rating
10 Buy
6 Hold
1 Sell
Moderate Buy
Current: 131.930
Low
160.00
Averages
260.36
High
330.00
Current: 131.930
Low
160.00
Averages
260.36
High
330.00
About DUOL
Duolingo, Inc. is a technology company. The Company is engaged in offering a mobile learning platform, as well as a digital English language proficiency assessment exam. It operates a freemium business model, namely, the app and the Website are accessible free of charge, although Duolingo also offers premium services for a subscription fee. Its solutions consist of the Duolingo App, Super Duolingo, Duolingo Max, Duolingo English Test: AI-Driven Language Assessment, Duolingo for Schools, and Duolingo ABC. The Duolingo App offers courses in over 40 different languages, including Spanish, English, French, German, Italian, Portuguese, Japanese and Chinese. Duolingo can also be accessed on desktop computers via a Web browser. Its subscription offering, Super Duolingo, offers learners additional features to enhance their learning experience. The Duolingo English Test is an online, on-demand, high-stakes English proficiency assessment. It also operates an animation and motion design studio.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Duolingo Shares Plunge 23.6%, Raising Investor Concerns
- Strategic Shift to User Growth: Duolingo's CEO Luis von Ahn has recently shifted the company's strategy to prioritize user growth over short-term profits, a move that has unsettled some shareholders but may present a buying opportunity for long-term investors.
- CFO Departure Adds Uncertainty: The announcement of CFO Matt Skaruppa's departure after six years has further heightened market concerns about the company's future, especially amid a shaky global economy that has seen the stock price continue to decline.
- Continued Stock Price Decline: According to S&P Global Market Intelligence, Duolingo's shares plunged 23.6% in January 2026, marking a continuation of the downtrend that began in 2025, reflecting the harsh reality of slowing subscriber growth.
- Profitability and Cash Flow: Despite the stock price pressure, Duolingo has maintained a 40% net profit margin over the last four quarters and generated $355 million in free cash flow from $964 million in sales, highlighting its potential as a cash-generating machine.
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- Stock Price Plunge: Duolingo's shares fell 23.6% in January 2026, reaching their lowest level since March 2023, primarily due to slower user growth amid a shaky global economy, reflecting market concerns about its future prospects.
- Executive Departure Impact: CFO Matt Skaruppa announced his departure after six years, with the market reacting mildly; however, this change may heighten investor uncertainty regarding the company's strategic direction, especially as it undergoes a management shift.
- Slowing User Growth: Despite Duolingo's management strategy adjustment in November 2025 aimed at optimizing user growth and teaching quality, daily active users (DAUs) fell short of expectations, indicating consumer hesitance to invest in personal improvement during the current economic climate.
- Strong Profitability: Despite challenges, Duolingo achieved a 40% net profit margin over the last four quarters and generated $355 million in free cash flow from $964 million in sales, showcasing its potential as a cash-generating machine that could support future growth.
See More
David Gardner Analyzes Risk Rating System
- Risk Rating System Overview: David Gardner introduces his 25-point risk rating system, used for over a decade, aimed at replacing vague risk labels with concrete, quantifiable numbers to help investors better understand investment risks.
- Case Studies: During the discussion of Etsy and Duolingo, analysts scored each company on profitability, cash flow, and brand recognition, noting that Etsy achieved $182 million in net income over the past 12 months, while Duolingo reached approximately $386 million.
- Market Competition Analysis: Etsy faces pressure from competitors like Amazon and Shopify, although it retains some brand influence in the crafts market; Duolingo, on the other hand, leads the language learning market with over 50% brand awareness.
- Future Outlook: Analysts believe that while Etsy's market performance has declined, its investments in AI and other technologies could serve as positive catalysts in the future, whereas Duolingo must be wary of potential threats from AI to its business model.
See More
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- Case Studies: Analyzing Etsy and Duolingo, the discussion highlights their performance in profitability, cash flow, and brand recognition, with Etsy achieving $182 million in net income over the past 12 months, while Duolingo reported $386 million, showcasing their differing competitive positions in the market.
- Market Competition Landscape: Etsy faces pressure from larger competitors like Amazon and Shopify, despite having 93 million buyers and 8.5 million sellers, its market share and brand loyalty are challenged; in contrast, Duolingo leads the language learning market with over 500 million users and brand awareness exceeding 50%.
- Future Outlook and Investment Recommendations: While Etsy's market performance is underwhelming and faces economic uncertainties and competitive pressures, it remains a platform with potential; conversely, Duolingo's growth potential and profitability make it more attractive to investors, especially amid the trend of integrating education and technology.
See More
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- Impact on Education Stocks: This initiative by Google could impact education stocks such as Coursera, Nerdy, and Duolingo, particularly intensifying competition in the online learning and test preparation sectors.
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- Strategic Shift to User Growth: Duolingo's CEO Luis von Ahn has recently shifted the company's strategy to prioritize user growth over short-term profits, a move that has unsettled some shareholders but may present a buying opportunity for long-term investors.
- CFO Departure Adds Uncertainty: The announcement of CFO Matt Skaruppa's departure after six years has further heightened market concerns about the company's future, especially amid a shaky global economy that has seen the stock price continue to decline.
- Continued Stock Price Decline: According to S&P Global Market Intelligence, Duolingo's shares plunged 23.6% in January 2026, marking a continuation of the downtrend that began in 2025, reflecting the harsh reality of slowing subscriber growth.
- Profitability and Cash Flow: Despite the stock price pressure, Duolingo has maintained a 40% net profit margin over the last four quarters and generated $355 million in free cash flow from $964 million in sales, highlighting its potential as a cash-generating machine.
See More
Duolingo Shares Plunge 23.6% Amid Slower Growth and CFO Departure
- Stock Price Plunge: Duolingo's shares fell 23.6% in January 2026, reaching their lowest level since March 2023, primarily due to slower user growth amid a shaky global economy, reflecting market concerns about its future prospects.
- Executive Departure Impact: CFO Matt Skaruppa announced his departure after six years, with the market reacting mildly; however, this change may heighten investor uncertainty regarding the company's strategic direction, especially as it undergoes a management shift.
- Slowing User Growth: Despite Duolingo's management strategy adjustment in November 2025 aimed at optimizing user growth and teaching quality, daily active users (DAUs) fell short of expectations, indicating consumer hesitance to invest in personal improvement during the current economic climate.
- Strong Profitability: Despite challenges, Duolingo achieved a 40% net profit margin over the last four quarters and generated $355 million in free cash flow from $964 million in sales, showcasing its potential as a cash-generating machine that could support future growth.
See More
David Gardner Analyzes Risk Rating System
- Risk Rating System Overview: David Gardner introduces his 25-point risk rating system, used for over a decade, aimed at replacing vague risk labels with concrete, quantifiable numbers to help investors better understand investment risks.
- Case Studies: During the discussion of Etsy and Duolingo, analysts scored each company on profitability, cash flow, and brand recognition, noting that Etsy achieved $182 million in net income over the past 12 months, while Duolingo reached approximately $386 million.
- Market Competition Analysis: Etsy faces pressure from competitors like Amazon and Shopify, although it retains some brand influence in the crafts market; Duolingo, on the other hand, leads the language learning market with over 50% brand awareness.
- Future Outlook: Analysts believe that while Etsy's market performance has declined, its investments in AI and other technologies could serve as positive catalysts in the future, whereas Duolingo must be wary of potential threats from AI to its business model.
See More
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- Risk Assessment Framework: David Gardner shares his 25-point risk rating system, used for over a decade, which quantifies risk through specific questions, helping investors gain a clearer understanding of stock risk levels for informed decision-making.
- Case Studies: Analyzing Etsy and Duolingo, the discussion highlights their performance in profitability, cash flow, and brand recognition, with Etsy achieving $182 million in net income over the past 12 months, while Duolingo reported $386 million, showcasing their differing competitive positions in the market.
- Market Competition Landscape: Etsy faces pressure from larger competitors like Amazon and Shopify, despite having 93 million buyers and 8.5 million sellers, its market share and brand loyalty are challenged; in contrast, Duolingo leads the language learning market with over 500 million users and brand awareness exceeding 50%.
- Future Outlook and Investment Recommendations: While Etsy's market performance is underwhelming and faces economic uncertainties and competitive pressures, it remains a platform with potential; conversely, Duolingo's growth potential and profitability make it more attractive to investors, especially amid the trend of integrating education and technology.
See More
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- Launch of Practice Exams: Google is introducing free SAT practice exams within the Gemini app, utilizing rigorously vetted content developed in partnership with The Princeton Review, aimed at enhancing users' exam preparation efficiency.
- Immediate Feedback Mechanism: After completing the practice tests, Gemini provides immediate feedback, helping students identify strengths and weaknesses, thereby optimizing their study strategies and improving their chances of passing the exam.
- Impact on Education Stocks: This initiative by Google could impact education stocks such as Coursera, Nerdy, and Duolingo, particularly intensifying competition in the online learning and test preparation sectors.
- Positive Market Reaction: Alphabet's stock has gained positive traction, rising 1.59% due to the launch of this new feature, indicating market recognition and anticipation of its educational technology strategy.
See More
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- Dividend Increase: Kinder Morgan topped Q4 revenue expectations with about $4.51 billion and adjusted earnings of $0.39 per share, while announcing a 2% quarterly dividend increase to $0.2925 per share, despite slightly lowering its 2026 earnings outlook, reflecting cautious sentiment amid ongoing energy market dynamics.
- Expansion Plans: USA Rare Earth announced plans to establish a high-capacity metal and alloy production plant in Lacq, France, capable of producing about 3,750 metric tons per year through its subsidiary Less Common Metals, aimed at strengthening transatlantic supply chains and boosting investor optimism.
- Market Volatility: Despite subdued overall market performance, small-cap benchmarks reached new highs, indicating sustained investor demand for risk assets against a backdrop of easing geopolitical tensions, which positively influenced the performance of certain tech stocks.
See More
