Duolingo Is Still Impressive, But No Longer Cheap (Rating Downgrade)

Duolingo has delivered strong top- and bottom-line growth, with shares up 39.1% since the March upgrade to 'Buy'. User engagement and monetization are accelerating, with DAUs up 21.2% and paid subscribers up 21.4% year over year. AI-driven feature expansion and content automation are driving platform stickiness and operational leverage, supporting long-term growth. I am downgrading DUOL to 'Hold' as valuation has become less attractive, despite continued business momentum and solid growth expectations.