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Duolingo (DUOL) Teams Up With Brawl Stars, Is The Stock Still Overvalued?

Simply Wall St · 1d ago

Duolingo (DUOL) is back in the spotlight after launching a global crossover with mobile game Brawl Stars. The collaboration pulls the Duo Owl and Spike into each other’s apps with time-limited quests and exclusive rewards.

For investors watching the tape, Duolingo’s share price has eased over the past month, with a 30 day share price return of 4% and a year to date share price return down 19.26%, while the 1 year total shareholder return has declined 53.09%.

Scan how Duolingo compares with other consumer-facing platforms by lining it up against a hand picked group of 18 high quality undiscovered gems that the market may be overlooking.

Duolingo now trades below both analyst targets and an estimated intrinsic value, even after the recent Brawl Stars bump. Is that discount a sign of well-placed caution, or is it overly harsh on the story so far?

Most Popular Narrative: 6% Overvalued

Duolingo last closed at $142.49, while the most followed narrative pegs fair value at $134.29 using a 7.24% discount rate. The gap is small, so the key consideration is whether future user monetization justifies that extra premium in the share price.

Continued investment in and expansion of adjacent educational categories such as Math, Music, and Chess leverages Duolingo's gamification infrastructure and strong brand. These new subjects broaden the platform's appeal, attract additional user segments, and are expected to drive higher ARPU and incremental revenue streams over the next several years.

See why 166 investors see Duolingo as 6% overvalued.

Result: Fair Value of $134.29 (OVERVALUED)

Still, the narrative can break if daily user gains lose momentum in mature markets, or if AI powered rivals undercut Duolingo’s pricing and engagement over time.

Find out about the key risks to this Duolingo narrative.

Another View: Duolingo Through The DCF Lens

Analysts on the narrative side see Duolingo as about 6% overvalued at a fair value of $134.29. The SWS DCF model tells a very different story, with an estimated future cash flow value of $307.15, which is 53.6% above the current $142.49 share price. Which signal carries more weight for you?

Look into how the SWS DCF model arrives at its fair value.

DUOL Discounted Cash Flow as at Sep 2026
DUOL Discounted Cash Flow as at Sep 2026

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Duolingo for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 32 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

Mixed signals on Duolingo so far, right? Act while the data is fresh, weigh the upside against the red flags, and check the full 2 key rewards and 2 important warning signs

Looking for more investment ideas beyond Duolingo?

Do not stop with Duolingo. Broaden your watchlist and let high quality stock ideas come to you instead of chasing every headline.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.