Duolingo: I've Seen This Story Before, This Is A Classic Growth Trap

Wait 5 sec.

Skip to contentHome page Seeking Alpha - Power to InvestorsOct. 12, 2025 10:55 AM ETDuolingo, Inc. (DUOL) StockDUOLJulian LinInvesting Group LeaderSummaryDuolingo is experiencing impressive growth and profitability, but user growth is decelerating and cyclicality risks are rising.DUOL trades at around 15x sales, but comparisons to sticky software business models are misleading due to likely higher churn rates.Future growth is expected to slow, and valuation multiples may compress further, making DUOL's current price appear rich despite recent declines.I am initiating coverage with a sell rating, recommending investors seek undervalued opportunities elsewhere due to DUOL's cyclical risks and potential headwinds.Looking for a portfolio of ideas like this one? Members of Best Of Breed Growth Stocks get exclusive access to our subscriber-only portfolios. Learn More »stockcam/iStock Unreleased via Getty ImagesAt first glance, Duolingo (NASDAQ:DUOL) might appear to be presenting an attractive buying opportunity given its fall from highs. The company has delivered incredible growth over the last several years, even many years after theMore on my IG serviceSign Up For My Premium Service "Best of Breed Growth Stocks"After a historic valuation reset, the growth investing landscape has changed. Get my best research at your fingertips today. Get access to Best of Breed Growth Stocks:My portfolio of the highest quality growth stocks.My best deep-dive investment reports.My investing strategy for the current market.and much moreThis article was written byJulian Lin36.04K FollowersJulian Lin is a financial analyst. He finds undervalued companies with secular growth that appreciate over time. His approach is to look for companies with strong balance sheets and management teams in sectors with long growth runways.Julian is the leader of the investing group Best Of Breed Growth Stocks where he only shares positions in stocks which have a large probability of delivering large alpha relative to the S&P 500. He also combines growth-oriented principles with strict valuation hurdles to add an additional layer to the conventional margin of safety. Features include: exclusive access to Julian's highest conviction picks, full stock research reports, real-time trade alerts, macro market analysis, individual industry reports, a filtered watchlist, and community chat with access to Julian 24/7. Learn more.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.CommentsRecommended For YouAbout DUOL StockSymbolLast Price% Chg1D5D1M6M1Y5Y10YMarket CapRev Growth (YoY)Short InterestPrev. CloseMore on DUOLRelated StocksSymbolLast Price% Chg--1D5D1M6M1Y5Y10YTrending AnalysisTrending NewsSeeking Alpha - Power to InvestorsPower to InvestorsFollow usDownload appContact usSubscription Support: 1-347-509-6837© 2025 Seeking AlphaTo ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.Is this happening to you frequently? Please report it on our feedback forum.If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.