Munger Mode rating: 4 out of 5 — Buy. Our own rating from the research report below, on business quality first: moat durability and management, with price separating the top three.
Charlie and I have spent considerable time studying Duolingo, and we find ourselves in that rare position of encountering a business we genuinely admire, run by a founder we respect, trading at a price that the market has beaten down over fears that may prove overwrought. At roughly $96 per share — down more than 80% from its 2025 high near $540 — the stock is priced as though the business is in secular decline. It is not. Duolingo is the dominant global platform for language learning, with 52.7 million daily active users, over $1 billion in annual revenue, nearly $370 million in free cash flow, a $1 billion net cash fortress, and a founder-CEO who owns 39% of the company and takes a $750,000 cash salary. The market's anxiety centers on AI disruption from ChatGPT and its ilk.
Recent filings analysed: 8-K (2026-08-10), 10-K (2026-02-27), 10-Q (2025-11-06), 10-Q (2025-08-07).
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