1Settimana·

Duolingo: My bull thesis in a chart

$DUOL

In your opinion, is Duolingo underestimated or is there really a risk of disruption/demand?

12 Commenti

Smudo@Smudeo

1Settimana

@thewolfofallstreetz the question is how does the store earn money 💸💰

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The W.@thewolfofallstreetz

1Settimana

@Smudeo Around 11 million subscribers! Almost 40% FCF margin is highly profitable from a cash perspective.

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CrashBurner@Psychedelic_Sunflower

1Settimana

I really like the product, use it every day and take out a subscription every year.
But I wouldn't invest in it. I see it with many friends who don't stick with it when learning and their subscription was then a one-off story.
I think the growth of permanent subscriptions is rather limited.

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The W.@thewolfofallstreetz

1Settimana

@Psychedelic_Sunflower Anecdotes from acquaintances are one thing ;- ) However, the impressive figures speak a different language quarter after quarter. Subscriptions have doubled in the last two years. The beauty of the business model is that many users - even if they cancel their paid subscription or stop using the free version - often come back later. That's almost 50% of users. Another plus point: Duolingo pays next to nothing for these users, so it saves a lot of acquisition costs. The new subjects are also interesting. I use Duolingo for chess. Chess already has >1 million daily users and was only launched in June. The growth is faster than their core product languages. Just my 2 cents. Of course, Duolingo also has risks, like any investment.

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Lord P.@lordprettylambo

1Settimana

+20% after hours following yesterday's quarterly figures. Let's see how it is received over the next few days.

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Manuel@Variett

1Settimana

I see a huge demand risk there, due to Ai. Was / is Stackoverflow a question answer platform for programmers as well.

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The W.@thewolfofallstreetz

1Settimana

@Variett Can understand the reasoning and is the biggest risk for Duolingo. However, AI has acted as a booster for Duolingo so far. They have developed more courses in the last year through AI than in the 12 years combined. There are also new AI features that were not possible before, e.g. video chat with Lily. There is also potential for new subjects in addition to languages: chess as a new subject is currently growing faster than languages back then, for example. Music and math are also just starting out. However, the most important argument against disruption is the following: Many users learn as a hobby or for better job opportunities. If AirPods soon offer real-time translation in your ear, that's cool, but not a use case for hobbyists. Google Translate has also been around for many years, but has not affected Duolingo's growth. What's more, the biggest difficulty in learning languages is motivation. Duolingo does this better than anything else on the market. They also have the best-known brand and the greatest reputation in the education market. This is particularly important to schools.

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Charmin@Charmin

1Settimana

@Variett I see zero, on the contrary. AI helps them. It's not as if AI can build such a beautiful, interactive language into an app like Duolingo does.

I don't know whether this thing still has a lot of growth potential (not researched), which is why the P/E ratio is already extremely sporty ... but AI won't be the problem here.

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The W.@thewolfofallstreetz

1Settimana

@Charmin There are 2 billion people in the world learning languages and the shift is going online. Duolingo is active worldwide and currently has 130 million monthly users. So for languages they have a user penetration of <7%. They now also offer music, math and chess, which makes the market even bigger. Also interesting: Duolingo expands the market, e.g. 80% of Duolingo users are people who are not part of the language learning market. So there should be enough runway. Plus: Duolingo has almost 60% global market share in app downloads, so pure dominance.

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Manuel@Variett

1Settimana

@thewolfofallstreetz good to know, I'm probably actually underestimating the potential. Especially when you look at it globally and different countries have different educational goals.

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Super_Geroy@Super_Geroy

1Settimana

@Charmin There was an article in the FAZ the other day, in which they also prompted a language learning agent. So the general AI apps are already competition.

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Charmin@Charmin

1Settimana

@Super_Geroy nonsense. Duolingo has dozens of interactive games etc. That's no comparison to a prompt.

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