DUOL Fell 16% In A Week. What To Do Now?.
Duolingo (DUOL) stock is down 15.6% in 5 trading days. Already own the stock or planning to buy? You might want to re-consider based on the valuation as the stock still looks expensive. Consider the following data:
- Size: A $15 Bil company with $885 Mil in revenue currently trading at $329.88.
- Fundamentals: Last 12 month revenue growth of 39.5% and operating margin of 9.5%.
- Liquidity: Has Debt to Equity ratio of 0.0 and Cash to Assets ratio of 0.7
- Valuation: Currently trading at P/E multiple of 127.6 and P/EBIT multiple of 177.2
- Has returned (median) 87% within a year following sharp dips since 2010. See DUOL Dip Buy Analysis.
While we like to buy dips if the fundamentals check out – for DUOL, see Buy or Sell DUOL Stock – we are wary of falling knives. Specifically, it is worth trying to answer if things get really bad, and DUOL drops another 20-30% to $230.92 levels, will we be able to hold on to the stock? What is the worst case scenario? We call it downturn resilience.
Below is a deep dive into Duolingo (DUOL) downturn resilience – specifically, its performance vs the market during past crises? Turns out, the stock has fared much worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.
Below are the details, but before that, as a quick background: DUOL provides a language-learning platform with courses in 40 languages via website and mobile app, serving users primarily in the U.S. and China.
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2022 Inflation Shock
- DUOL stock fell 68.9% from a high of $202.69 on 23 September 2021 to $63.00 on 11 May 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 9 November 2023
- Since then, the stock increased to a high of $540.68 on 14 May 2025 , and currently trades at $329.88
| DUOL | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -68.9% | -25.4% |
| Time to Full Recovery | 547 days | 464 days |
Worried that DUOL could fall much more? You could take a look at the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.