Duolingo's Sky-High Valuation Supported by Exceptional Revenue Growth
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Duolingo's price-to-sales ratio is high at 16.6x compared to other consumer services companies, suggesting it may be overvalued
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However, Duolingo has shown strong 43% revenue growth in the last year and 199% over the last 3 years, justifying its high valuation
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Analysts forecast Duolingo's revenue to grow 36% next year, much higher than the 14% industry average, supporting its high P/S ratio
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Shareholders seem confident in Duolingo's ability to deliver strong future revenue growth to match its high valuation
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Despite some warning signs, Duolingo's exceptional past and expected future revenue growth explains its high P/S ratio