Unlocking value in EdTech: an equity research paper on Duolingo Inc. (DUOL)

Abstract

This thesis investigates the target share price of Duolingo, employing the DCF method for intrinsic valuation and trading and transaction comparables for relative valuation. The findings indicate a target share price of $237.8, marking an 8% premium to the share price as of finalization of this report, which leads to a “buy” recommendation. Furthermore, the paper underscores the limitations of traditional valuation methods when applied to high-growth tech firms. It is enriched with a literature review that critiques their applicability in this context, highlighting the need for nuanced valuation methodologies suited to the unique dynamics of high-growth tech companies.