A quantitative model issued a Sell rating for Duolingo (DUOL). The model cites significant stock price underperformance and overvaluation relative to Consumer Discretionary sector peers.
Duolingo’s forward Price/Sales ratio stands at 5.33. This figure is considerably higher than the sector median of 0.97. The stock's one-year performance dropped significantly. It lags the sector median.
The company maintains a strong balance sheet. It features a high current ratio. It also maintains a low debt-to-equity ratio.
Duolingo reports a high net margin. It also maintains a solid three-year revenue growth rate.
The analysis notes potential capital use inefficiency. Duolingo’s Return on Invested Capital (ROIC) remains below its Weighted Average Cost of Capital (WACC).