DUOL is a bull thesis based on compelling valuation (~18x P/E) and improving fundamentals (DAU growth, content expansion) despite slowing bookings; the stock has gained momentum (+66% in 6 months).

One of my more contrarian plays of the last year or so is actually Dualingo. That is stock number four. This is a pretty compelling valuation if they're able to do what management thinks they're going to be able to do in turning the business around.

You can see that over the past year stock has really struggled down about 56%. But let's look at over the past 3 months up about 18.5%. 6 months up 66% starting to get some momentum in the business.

So, I was definitely dollar cost averaging earlier this year and later in 2025 with my position in Dualingo, but the price earnings multiple now only about 18. Price to free cash flow is about the same about 17 and revenue growth still over the past year up 29%. So, a stock that's down that much still up 29%.

But here's what investors are worried about. The growth rate is slowing, is decelerating. This is not something that investors ever like to see. And if you look at the quarterly numbers, you're not looking at just 18% year-over-year growth in the most recent quarter, the second quarter of 2026.

This is what investors are worried about. This is where I think you have to understand where the business is going in the future.

So, one of the things that investors were looking at recently is what's going on with bookings. Well, bookings have slowed a little bit. What is the reason for that? Well, management has been much more focused on engagement than they have on monetizing the business.

So, there's three metrics that they give each quarter. the monthly active users, the daily active users, and then the paid subscribers. So, the challenge has been with this monthly active user number.

So, been a little bit volatile, but it used to go just up and to the right. Every single quarter, they would add more monthly active users. That hasn't been the case since about the March 2025 quarter.

So, about a year that things kind of slowed down, kind of bumped around here. But, you can see that things picked up. They actually added about 3 million monthly active users in the most recent quarter.

That was after adding more than 4 million in the quarter before. So things at least for now look like they're moving in the right direction.

But if you look at daily active users, this is much more encouraging. And this is what you want to see. You want to see people using Dualingo on a daily basis. Those are the kind of engaged people that are going to eventually pay for Dualingo.

So daily active users going up and to the right. That's what we want to see. Eventually that's going to make its way to the paid users. You can see that this growth slowed a little bit, but I think we're going to see just a drag between those daily active users becoming monetized users in the future.

That's where I think that revenue growth that I showed earlier is eventually going to turn around and you're going to eventually be going to be able to compound this at 20 plus maybe 30 plus%.

Couple of reasons to really like what they're doing. They're adding more kinds of content, so more modules and not just in languages. You can now do math. You can now do chess.

I think they're going to be able to build out that portfolio, give much more value to people. They've also been able to use AI in a lot of different ways. Not only launching products more quickly, but also making them much more interactive.

I actually walked downstairs and heard my daughter talking to Dualingo. We don't even pay for Dualingo, but this is a product that you can now interact with those AI tools even on a free version right now.

That's going to push much many more people, many more families into paid tiers, be able to monetize in lots of different ways.

I'd like the future for Dolingo. It's a volatile stock, but you can see over the past 6 months, the market is starting to see that this turnaround plan that they've got where they kind of maybe push that monetization a little bit too far in 2025.

That's changed in 2026. But you look at their goals for 2028, 2029. I think this is still a really good growth stock and a company that's trading at a pretty compelling valuation today.