<div id="readability-page-1"><div><ul> <li>If you are wondering whether Duolingo at US$176.66 still makes sense for your portfolio, the real question is how that price compares with what the business might reasonably be worth.</li> <li>The stock has seen mixed returns, with a 4.6% decline over the last 7 days and a 10.0% decline over the last 30 days, while year to date it is roughly flat at a 0.1% return. The 1 year return sits at a 44.2% decline, compared with a 122.6% return over 3 years.</li> <li>Recent headlines have focused on Duolingo's position in language learning and its role in the broader consumer services space. This helps frame how investors are thinking about long term demand for its platform and is useful when assessing whether the recent share price pullback represents a reassessment of expectations or simply short term sentiment.</li> <li>Duolingo currently scores 3 out of 6 on our valuation checks, and you can see the breakdown in our valuation score. We will compare this across several standard methods before finishing with a more complete way to think about what the stock could be worth.</li> </ul> <p>Find out why Duolingo's -44.2% return over the last year is lagging behind its peers.</p> <h3>Approach 1: Duolingo Discounted Cash Flow (DCF) Analysis</h3> <p>A Discounted Cash Flow model takes estimates of a company’s future cash flows, then discounts them back to today’s dollars to estimate what the whole business could be worth right now.</p> <p>For Duolingo, the model used is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month Free Cash Flow is about $341.6 million. Analysts provide explicit Free Cash Flow estimates out to 2028, where Free Cash Flow is projected at $732.0 million. Beyond that, Simply Wall St extrapolates ten year projections, with discounted values for each year from 2026 through 2035 ranging from about $464.9 million to $612.1 million.</p> <p>Pulling these cash flows together, the model arrives at an estimated intrinsic value of about $452.57 per share. Compared with the recent share price of $176.66, this implies an intrinsic discount of roughly 61.0%, which indicates that the shares screen as undervalued on this DCF view.</p> <p><strong>Result: UNDERVALUED</strong></p> <p>Our Discounted Cash Flow (DCF) analysis suggests Duolingo is undervalued by 61.0%. Track this in your watchlist or portfolio, or discover 882 more undervalued stocks based on cash flows.</p> <figure><img height="476" src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/7e97f1a1-35a6-4ab8-9664-3ea2b74aba5a/chart/dcf?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="746" original-src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/7e97f1a1-35a6-4ab8-9664-3ea2b74aba5a/chart/dcf"/><figcaption>DUOL Discounted Cash Flow as at Jan 2026</figcaption></figure> <p>Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Duolingo.</p> <h3>Approach 2: Duolingo Price vs Earnings</h3> <p>For profitable companies, the P/E ratio is often a useful shorthand because it relates what you pay today to the earnings the business is currently generating. It also quickly shows how the market is weighing that earnings stream against other opportunities.</p> <p>What counts as a “normal” P/E depends heavily on what investors expect for future growth and how risky those earnings appear. Higher expected growth or lower perceived risk can justify a higher P/E, while slower growth or higher risk tends to support a lower P/E.</p> <p>Duolingo currently trades on a P/E of 21.16x. That compares with an average of about 17.10x for the broader Consumer Services industry and a peer group average of 29.89x. Simply Wall St’s proprietary “Fair Ratio” for Duolingo is 9.83x, which reflects a model that factors in its earnings growth profile, industry, profit margins, market capitalization and risk characteristics.</p> <p>This Fair Ratio is more tailored than a simple peer or industry comparison because it seeks to adjust for the specific mix of growth, risk and profitability for Duolingo, rather than assuming that all companies in the same sector deserve similar multiples.</p> <p>Since Duolingo’s actual P/E of 21.16x is above the Fair Ratio of 9.83x, the shares screen as overvalued on this basis.</p> <p><strong>Result: OVERVALUED</strong></p> <figure><img height="476" src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/7e97f1a1-35a6-4ab8-9664-3ea2b74aba5a/chart/pe-multiple-vs-industry?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="746" original-src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/7e97f1a1-35a6-4ab8-9664-3ea2b74aba5a/chart/pe-multiple-vs-industry"/><figcaption>NasdaqGS:DUOL P/E Ratio as at Jan 2026</figcaption></figure> <p>P/E ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1446 companies where insiders are betting big on explosive growth.</p> <h3>Upgrade Your Decision Making: Choose your Duolingo Narrative</h3> <p>Earlier we mentioned that there is an even better way to understand valuation. On Simply Wall St you can use Narratives, where you write the story you believe about Duolingo, connect it to your own revenue, earnings and margin estimates, and see a fair value that updates as news and earnings arrive. This makes it easy to compare that fair value with the current price and decide whether the stock looks attractive or not, while also seeing how other investors on the Community page might lean very optimistic with a US$600 view or more cautious with a US$239 view based on the same shared information.</p> <p>Do you think there's more to the story for Duolingo? Head over to our Community to see what others are saying!</p> <figure><img height="476" src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/7e97f1a1-35a6-4ab8-9664-3ea2b74aba5a/chart/quote-price?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="746" original-src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/7e97f1a1-35a6-4ab8-9664-3ea2b74aba5a/chart/quote-price"/><figcaption>NasdaqGS:DUOL 1-Year Stock Price Chart</figcaption></figure> <p><em> This article by Simply Wall St is general in nature. <strong>We provide commentary based on historical data     and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice.</strong> It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your     financial situation. We aim to bring you long-term focused analysis driven by fundamental data.     Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.     Simply Wall St has no position in any stocks mentioned.</em></p></div></div>

DUOL

<p>Duolingo's stock has declined 44.2% over the past year, currently priced at $176.66. Despite a flat year-to-date return, the company shows potential for undervaluation based on a Discounted Cash Flow (DCF) analysis, suggesting an intrinsic value of $452.57 per share, indicating a 61% discount. However, its Price-to-Earnings (P/E) ratio of 21.16x is above the industry average of 17.10x, suggesting it may be overvalued. Investors are encouraged to assess their narratives and expectations regarding Duolingo's future performance.</p>

Is Duolingo (DUOL) Attractive After A 44% One Year Share Price Slide?