Duolingo

Duolingo turns nearly 40 cents of every dollar into pure profit, with net margins at 39.91%. That's elite territory for any business, and it shows the app prints money once users get hooked on their daily streaks.

The global online language learning market is heading toward 54 billion dollars by 2030. Duolingo only has about 3% of that today, so there's a giant runway as the app keeps adding users and expanding into music, math, and chess.

Management is intentionally slowing things down, guiding for just 10% bookings growth this year after running over 30% last year. They're cutting ads to make the free app more enjoyable, which sounds nice but spooked the market hard.

The stock has dropped roughly 80% from last year's highs because investors worry tools like ChatGPT will replace language apps. Even though Duolingo argues habit formation is its real moat, the fear keeps pressuring the share price.