📊 AI Stock Rating — Summary

Duolingo reported quarterly revenue of $271.7 million and an EPS of $6.36, generating a notable net income of $292.2 million. The net income distinctly exceeded its quarterly revenue, thanks in part to the recognition of deferred tax assets or adjustments, highlighting an extraordinarily high net margin. Free cash flow for the quarter was $79.38 million, suggesting effective cash management despite the lack of dividends or buybacks. The balance sheet remains robust with total assets of $1.89 billion against liabilities of $578.1 million, resulting in a net debt position of -$914.2 million, indicating more cash than debt. The stock has analyst price targets up to $575, with a consensus suggesting some potential upside.

AI Score Breakdown

Revenue Growth — Score: 7/10

The company achieved solid revenue growth, recorded at $271.7 million for the quarter. This performance reflects stability and is supported by a strong market presence in digital language learning.

Profitability — Score: 9/10

Exceptional profitability with net income of $292.2 million and EPS of $6.36. Net margins appear exceedingly high, indicative of one-time adjustments or exceptional items as typical net margin would not exceed revenue.

Cash Flow Quality — Score: 8/10

Free cash flow was positive at $79.38 million. Operating cash flow was solid, signaling strong cash generation capabilities without reliance on capital expenditure cuts. No dividends or buybacks were executed.

Leverage & Balance Sheet — Score: 9/10

Strong balance sheet with total equity of $1.31 billion and a net debt position of -$914.2 million, demonstrating robust financial resilience and a substantial cash position.

Shareholder Returns — Score: 5/10

While there were no dividends or buybacks, analyst price targets and the resilient balance sheet present potential appreciation opportunity. Share price performance will ultimately dictate this score higher in future assessments based on market activity.

Analyst Sentiment & Valuation — Score: 7/10

The valuation appears justifiable with analyst price targets up to $575 suggesting upside. Specific valuation metrics are lacking but overall market sentiment appears cautiously optimistic at this point.

⚠ AI-generated — informational only, not financial advice.