Duolingo 2028 normalized FCF valuation

Duolingo Inc. (DUOL)
By@hypertonx
Assumptions as of 2026-09-29
USD
Updated Sep 29, 2026 · Revised 5 times
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Duolingo 2028 normalized FCF valuation

2028 normalized free-cash-flow exit valuation maintained after reviewing Q2 2026 materials. Management reaffirmed $1.207B of FY2026 revenue, raised its adjusted EBITDA outlook to $320M, and reported 23% DAU growth, but bookings growth slowed to 8% and Q2 FCF margin was 26.3%. The base case continues to use 15% growth in 2027 and 2028, a 28% normalized FCF margin, and a 20x exit multiple; this refresh updates source provenance and the current market-price input.

as of 2026-09-29

Fair value per share
$161.74
Upside / downside to current price
7.9%

Balance sheet

1,314

Cash flow

28.0%

Discounting

11.0%
2.5

Market

$149.92
Latest DUOL quote · updated Oct 9, 2026 2:00 PM MDT

Multiple

20

Revenue

15.0%
15.0%
1,207

Share count

50.7

Sources

  1. September 29 Modeledge reference DUOL stock price $142.62, retrieved 2026-09-29T15:15:04.348186-06:00; a post-session reference snapshot, not an asserted official close. No operating or intrinsic valuation inputs changed in this review. (accessed 2026-09-29)
  2. September 29: investigated the 6.20% rebound. Zalando's September 28 primary release offers eligible members in 17 markets up to four months of Super Duolingo; it does not quantify paid conversions, revenue, margin or minimum commitments. No proven link between that announcement and the entire daily move. Preserve $1,207M revenue, 15% forward growth, 28% normalized FCF margin, 20x exit multiple and 50.7M diluted shares. — corporate.zalando.com (accessed 2026-09-29)
  3. September 28 Modeledge reference DUOL stock price $134.3, retrieved 2026-09-28T16:46:37.95322-06:00; a post-session reference snapshot, not an asserted official close. Operating assumptions are unchanged except separately documented updates. (accessed 2026-09-28)
  4. September 28: investigated the 6.42% decline. Fully read September 9 Citi discussion: 100M DAU goal for 2028, stronger retention, lower AI video-call cost and testing of Max/Super pricing; no 2027 financial guidance. September 28 Form 4 reports 46,682 option exercises, 1:1 class conversion and sale under a June 2 plan; avoid triple counting and automatic additions to diluted shares. Preserve $1,207M revenue, 15% forward growth, 28% FCF margin, 20x and 50.7M dilution. — modeledge.ai (accessed 2026-09-28)
  5. Additional supporting record for the September 28 DUOL review. — modeledge.ai (accessed 2026-09-28)
  6. September 14 company-specific filing/press discovery and market-news checks did not establish a new operating forecast or capital-structure change. Preserve the existing intrinsic assumptions; continue the model's unresolved refresh checklist. (accessed 2026-09-14)
  7. September 14 Modeledge reference DUOL share price $151.14 retrieved after the regular U.S. close. Quote updates affect market-relative outputs; forecast changes, if any, are separately identified. (accessed 2026-09-14)
  8. Q2 revenue was $298.5M, total bookings were $289.1M, free cash flow was $78.6M, FY2026 guidance called for $1.207B of revenue and $320M of adjusted EBITDA, and fully diluted shares outstanding were approximately 50.7M. — storage.googleapis.com (accessed 2026-08-10)
  9. Duolingo filed its Q2 2026 Form 10-Q with June 30, 2026 cash and cash equivalents of $1.181B, short-term investments of $133M, Q2 free cash flow of $78.6M, and Q2 share repurchases of $44.4M. — sec.gov (accessed 2026-08-10)

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