How does DUOLINGO (NASDAQ:DUOL) stack up against Mark Minervini’s strategy?

Our stock screener has spotted DUOLINGO (NASDAQ:DUOL) as a stocks which checks several boxes as specified by Mark Minervini. We will dive into an analysis below.

Checking the Minervini Trend Template.

DUOL checks all the boxes when evaluating the Minervini Trend Template. This is a set of basic technical criteria to identify stocks in strong uptrends:

• ✔ Relative Strength is above 70.
• ✔ Current price is within 25% of it's 52-week high.
• ✔ Current price is at least 30% above it's 52-week low.
• ✔ The current price is above the 50-, 150- and 200-day SMA price line.
• ✔ The SMA(200) is trending upwards.
• ✔ The SMA(150) is above the SMA(200)
• ✔ The SMA(50) is above the SMA(150) and the SMA(200)

Why we can consider DUOL a High Growth Stock.

ChartMill assigns a High Growth Momentum Rating (HGM) to every stock. This score ranges from 0 to 10 and evaluates the different growth and profitability aspects, including accelleration, surprises and revisions. DUOL scores a 6 out of 10:

Explosive Earnings Growth

• The quarterly earnings of DUOL have shown a 26.32% increase compared to the previous quarter, as revealed in the recent financial report. This growth signifies positive momentum in the company's financials, pointing towards a promising upward trend
• Accelerating EPS growth for DUOL: the current Q2Q growth of 26.32% exceeds the previous quarter Q2Q growth of 15.38%.
• DUOL has experienced 108.0% growth in EPS over a 12 month period, demonstrating its ability to generate sustained and positive earnings momentum.
• With consistent quarter-to-quarter (Q2Q) revenue growth of 37.71%, DUOL exemplifies its ability to generate increased sales and revenue streams. This growth signifies the company's strong business performance and its potential for continued growth.
• DUOL has achieved significant 1-year revenue growth of 40.84%, signaling its ability to capture market opportunities and drive top-line expansion. This growth indicates the company's effective execution and its potential for continued success.
• DUOL has a strong history of beating EPS estimates 3 times in the last 4 quarters, signaling its ability to consistently exceed market expectations. This indicates the company's strong financial performance and its potential for creating shareholder value.

Profitability & Financial Strength

• DUOL has experienced notable growth in its operating margin over the past year, reflecting improved operational performance. This growth suggests the company's ability to generate higher profits from its core business activities.
• With a favorable trend in its profit margin over the past year, DUOL demonstrates its ability to enhance profitability through efficient operations.
• With a favorable trend in its free cash flow (FCF) over the past year, DUOL demonstrates its ability to generate robust cash flows and maintain financial stability. This growth reflects the company's focus on efficient capital allocation and cash management.
• The Return on Equity (ROE) of DUOL stands at 10.74%, reflecting the company's strong profitability and effective utilization of shareholder equity. This metric signifies the company's ability to generate returns for its investors.
• With a Debt-to-Equity ratio at 0.0, DUOL showcases its prudent financial management. The company's balanced approach between debt and equity reflects its commitment to maintaining a stable capital structure.

Market Strength & Institutional Confidence

• With institutional shareholders at 92.85%, DUOL demonstrates a healthy ownership distribution. This reflects a mix of institutional and individual investors, creating a market environment that may foster increased trading activity and price discovery.
• The Relative Strength (RS) of DUOL has consistently been strong, with a current 98.39 rating. This indicates the stock's ability to exhibit relative price outperformance and reflects its competitive strength.

Why is DUOL a setup?

The Setup Rating of a stock determines to which extend the stock is consolidating. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. For DUOL this score is currently 3:

Although DUOL has an excellent technical rating, it does not offer a high quality setup at the moment. Price movement has been a little bit too volatile to find a nice entry and exit point. It is probably a good idea to wait for a consolidation first.

For an up to date full technical analysis you can check the technical report of DUOL

Concluding

Our High Growth Momentum + Trend Template screen will find you more ideas which meet the Minervini criteria.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.