Latest news with #techgrowth
Yahoo
6 days ago
- Business
- Yahoo
Is Duolingo Stock a Buy in the Second Half of 2025?
Duolingo delivered a record performance in 2024. It has the potential to sustain its growth momentum for the foreseeable future. The stock's high valuation should give investors pause. 10 stocks we like better than Duolingo › Duolingo (NASDAQ: DUOL) stock has been on fire recently. In the last 12 months, it has risen 164% due to strong financial results and growth prospects. If you missed out on that impressive rally, you may now be considering initiating a position in the stock. Here's what you need to know about this high-growth tech company. Duolingo offers the world's No. 1 language learning app, and it enjoyed a stellar 2024. All key metrics, including revenue, bookings, and net income, reached record levels. Revenue surged 41% to $748 million, while net income rose more than sixfold from $14 million to $89 million. And the company kicked off 2025 with a bang as well. For the first quarter, revenue jumped 38% year over year to $231 million, and bookings increased 38% to $272 million. Its adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) margin also improved about 900 basis points to 27.2% for the quarter. The foundation of that strong performance is steady user growth. Monthly active users (MAU) reached 130.2 million, up 33% year over year. Daily active users saw an even bigger boost, up 49% to 46.6 million. But overall user growth is just one part of the story. Duolingo is also improving its paid subscriber penetration rate, which increased year over year from 8.6% to 8.9%. Ongoing improvements to its content and user experience have led to better user engagement. The app's virtual assistant Lily, for example, allows Duolingo Max subscribers to practice their language skills in a fun, low-stakes environment to help them gain confidence over time. Despite the company's already impressive reach and scale, its has a long growth runway. Management says the online language learning industry will be worth $47 billion in 2025, just a small slice of the $6 trillion of annual global education spending. The company also estimates 2 billion people worldwide are learning a new language. And of its 130.2 million MAUs, less than one in 10 are paying subscribers, giving the tech company a huge opportunity to grow its user base and convert them over time. To this end, Duolingo's continuous improvement efforts should significantly contribute to attracting, retaining, and converting normal learners to paid subscribers. It has added new subjects, such as music and math, in an effort to expand beyond its language courses. Introducing artificial intelligence to the platform is another example of how Duolingo is working to improve learning outcomes. The company plans to enhance the user experience by making Lily and her environment 3D with interactive backgrounds to make conversations more immersive for learners. While there are many things to like about Duolingo's solid execution and growth prospects, the stock doesn't come cheap. As of this writing, it boasts a price-to-earnings ratio of more than 250. Even if you believe this is a growth-first story and focus on its price-to-sales valuation instead, at 30 times trailing revenue, Duolingo is one of the most expensive large-cap stocks in the Nasdaq Composite index. A premium is expected for most growth stocks, but paying such a hefty price comes with significant risk. Even a small hiccup that calls Duolingo's bullish outlook into question could see its valuation contract dramatically. That potential for short-term volatility, however, shouldn't immediately scare investors away from a company that's clearly firing on all cylinders as it tackles a massive market opportunity. With that in mind, a position in Duolingo makes the most sense for investors with a long investment horizon of at least five years -- or an immense risk appetite. Before you buy stock in Duolingo, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Duolingo wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor's total average return is 979% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Lawrence Nga has no position in any of the stocks mentioned. The Motley Fool recommends Duolingo. The Motley Fool has a disclosure policy. Is Duolingo Stock a Buy in the Second Half of 2025? was originally published by The Motley Fool
Globe and Mail
13-05-2025
- Business
- Globe and Mail
Palantir Is Now a Top-10 Tech Company. Should You Buy Standout PLTR Stock Now?
Palantir Technologies (PLTR) has entered the top 10 U.S. tech companies by market cap, surpassing Salesforce (CRM) to claim the tenth spot. According to a CNBC report, the data analytics is now valued at $281 billion by market cap after shares jumped 8% last week, continuing a remarkable rally that has seen the stock more than quintuple over the past year. Founded in 2003 by Peter Thiel and CEO Alex Karp, Palantir has defied the broader tech market downturn, with shares climbing 70.7% in 2025 while the Nasdaq Composite ($NASX) is down 1.5%. The company's growth has been fueled by its booming government business, which grew 45% to $373 million last quarter, including a $178 million U.S. Army contract for artificial intelligence (AI)-enabled systems. Investors are paying premium prices for Palantir stock, which trades at 520 times trailing earnings and 90 times revenue, significantly higher than other top tech companies. Let's see if you should buy PLTR stock at the current valuation. Is Palantir Stock a Good Buy Right Now? Palantir Technologies posted solid results in Q1 of 2025, showcasing robust growth across all segments. Total revenue reached $884 million, up 39% year-over-year, primarily driven by strong performance in the U.S. market. Revenue for Palantir's U.S. commercial business grew by 71% year-over-year and 19% quarter-over-quarter to $255 million. U.S. government revenue performed admirably, growing 45% year-over-year to $373 million. Overall U.S. revenue climbed 55% year-over-year to $628 million, underscoring Palantir's strength in its home market. Contract values showed impressive momentum, with the total value of U.S. commercial contracts reaching $810 million, a 183% increase from the previous year. The value of U.S. commercial remaining deals grew 127% year-over-year to $2.3 billion, indicating healthy future revenue potential. Palantir's profitability metrics were equally impressive. It reported adjusted operating income of $391 million with a 44% margin, and adjusted free cash flow of $370 million (42% margin). The Rule of 40 score, which is the sum of revenue growth rate and adjusted operating margin, reached 83%, demonstrating exceptional financial health. Palantir continued to expand its customer base, with U.S. commercial customers increasing 65% year-over-year to 432. During Q1, Palantir closed 139 deals of at least $1 million, including 51 deals worth $5+ million and 31 deals exceeding $10 million. Highlighting its technological leadership, Palantir showcased several key innovations and partnerships during the quarter. Its TITAN program was ranked among the top-performing programs by U.S. Army leaders, while the Maven Smart System is being deployed to enhance NATO operations. The company also unveiled new enterprise automation solutions at DevCon 2 and reported strong adoption of its Artificial Intelligence Platform (AIP). Palantir expects Q2 revenue of $936 million at the midpoint estimates, while full-year sales are forecast at $3.9 billion. Moreover, U.S. commercial revenue is projected to exceed $1.178 billion (68% growth). The company ended Q1 with $5.4 billion in cash and no debt, positioning it strongly for continued investment and expansion. What's the Target Price for PLTR Stock? While Palantir continues to grow at an impressive pace, investors and analysts are wary of the tech stock's lofty valuation. Palantir is forecast to grow adjusted earnings from $0.41 per share in 2024 to $2.04 per share in 2029, indicating a compounded annual growth rate of almost 38%. However, out of the 20 analysts covering PLTR stock, the consensus is a tepid 'Hold,' and the average target price for PLTR stock is $91.11, about 30% below the current trading price.
