MeritValue

Duolingo, Inc.

DUOLdata completeness 88%6 fiscal years on file

Data notes: no data for concept 'totalDebt'; no data for concept 'interestExpense'

The thesis, from the filings

Duolingo, Inc. earns about 4% on equity, below its ~9% cost of capital, but has diluted owners by 106% over 5 years — no moat visible in the numbers. The estimate methods put fair value between $3.45 and $358.99 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$250.8M1$369.5M2$531.1M3$748M3$1.04B3
Net income−$60.1M4−$59.6M5$16.1M6$88.6M6$414.1M6
Operating cash flow$9.17M7$53.7M8$153.6M9$285.5M9$387.8M9
Capital expenditure$3.59M10$5.56M11$3.19M12$12.1M12$18.1M12
Free cash flow (derived)$5.58M7$48.1M8$150.4M9$273.4M9$369.7M9
Total debt—————
Cash & equivalents$553.9M13$608.2M14$747.6M15$785.8M16$1.04B16
Diluted shares23.4M39.5M46.5M47.1M48.3M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$278.84
your share of equity
Profit it earned you last year
$85.71
Free cash flow it threw off
$76.54
Debt you’d be carrying
—

10 shares is a claim on $278.84 of net worth that earned you $85.71 and generated $76.54 of cash last year.

iii. Is this a good business?
Moat signal · return on equity
4% avg · 5y
FY21 -12%FY22 -11%FY23 2%FY24 11%FY25 31%

It earned about 4% on equity against a ~9% cost of capital — below the cost of funding. The numbers show no moat.

seeing a moat in the numbers →
Management signal · capital allocation
+106% shares · 5y

Share count is up 106% over 5 years — owners have been diluted. Worth asking what they got for it.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $3.45 and $358.99 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$358.99
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth20.0%
  • fcfBase$273.4M
DCF · Growth Exit 5Y
$205.97
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth20.0%
  • fcfBase$273.4M
Earnings Power Value
$3.45
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$16.1M
  • growthAssumed0.0%
Graham Number
$73.33
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years20.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $205.97
The three cases
Bear0.0%$102.31
Base20.0%$205.97
Bull20.0%$205.97

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 20.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001562088-24-000050 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0001562088-25-000042 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0001628280-26-012494 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-12-31 · accession 0001562088-24-000050 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001562088-25-000042 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001628280-26-012494 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001562088-24-000050 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001562088-25-000042 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001628280-26-012494 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001562088-24-000050 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0001562088-25-000042 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001628280-26-012494 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0001562088-23-000052 (CashAndCashEquivalentsAtCarryingValue)
  14. 10-K · period ending 2022-12-31 · accession 0001562088-24-000050 (CashAndCashEquivalentsAtCarryingValue)
  15. 10-K · period ending 2023-12-31 · accession 0001562088-25-000042 (CashAndCashEquivalentsAtCarryingValue)
  16. 10-K · period ending 2024-12-31 · accession 0001628280-26-012494 (CashAndCashEquivalentsAtCarryingValue)