Where Will Duolingo Stock Be in 5 Years?
Up by a whopping 125% year to date, Duolingo (NASDAQ: DUOL) stock has richly rewarded near-term investors. While the language learning app's freemium business model initially looked hard to monetize, management seems to be on the path to sustainable profitability. Let's explore how the situation could develop over the next five years.
Founded in 2011 and going public in 2021, Duolingo operates its namesake language learning app, available on IOS and Android. From personal experience, the platform is very similar to legacy language learning software like Rosetta Stone. But Duolingo disrupts this market through a freemium business model where the most valuable services are free, supported by advertisements, in-app purchases, and a subscription tier with perks like an ad- and interruption-free experience.
Revenue jumped by 44% to $126.8 million on a 50% increase in monthly active users (MAUs) to 74.1 million. Duolingo's 5.2 million paid subscribers are only 7% of its total user base. But the platform is becoming big enough to support itself on this small parentage.
Source Fool.com
