Laureate Education (NASDAQ:LAUR) versus Duolingo (NASDAQ:DUOL) Financial Review

Duolingo (NASDAQ:DUOL) and Laureate Education (NASDAQ:LAUR) are both mid-cap consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, risk and profitability.

Profitability

This table compares Duolingo and Laureate Education’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Duolingo	35.88%	12.10%	8.24%
Laureate Education	17.57%	23.54%	11.72%

Valuation & Earnings

This table compares Duolingo and Laureate Education”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Duolingo	$1.04 billion	6.61	$414.07 million	$8.44	17.37
Laureate Education	$1.70 billion	3.08	$281.63 million	$2.23	17.04

Duolingo has higher earnings, but lower revenue than Laureate Education. Laureate Education is trading at a lower price-to-earnings ratio than Duolingo, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

91.6% of Duolingo shares are held by institutional investors. Comparatively, 96.3% of Laureate Education shares are held by institutional investors. 16.6% of Duolingo shares are held by insiders. Comparatively, 1.5% of Laureate Education shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Duolingo and Laureate Education, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Duolingo	1	14	8	1	2.38
Laureate Education	1	2	4	0	2.43

Duolingo currently has a consensus price target of $124.38, indicating a potential downside of 15.14%. Laureate Education has a consensus price target of $40.50, indicating a potential upside of 6.58%. Given Laureate Education’s stronger consensus rating and higher probable upside, analysts clearly believe Laureate Education is more favorable than Duolingo.

Volatility and Risk

Duolingo has a beta of 1.05, suggesting that its share price is 5% more volatile than the S&P 500. Comparatively, Laureate Education has a beta of 0.41, suggesting that its share price is 59% less volatile than the S&P 500.

Summary

Duolingo beats Laureate Education on 9 of the 15 factors compared between the two stocks.

About Duolingo

Duolingo, Inc. operates as a mobile learning platform in the United States, the United Kingdom, and internationally. The company offers courses in 40 different languages, including Spanish, English, French, German, Italian, Portuguese, Japanese, and Chinese through its Duolingo app. It also provides a digital English language proficiency assessment exam. Duolingo, Inc. was incorporated in 2011 and is headquartered in Pittsburgh, Pennsylvania.

About Laureate Education

Laureate Education, Inc., together with its subsidiaries, offers higher education programs and services to students through a network of universities and higher education institutions. The company provides a range of undergraduate and graduate degree programs in the areas of business and management, medicine and health sciences, and engineering and information technology through campus-based, online, and hybrid programs. It also offers specialized courses for technical and vocational training; and senior high school. Its services are provides in Mexico, Peru, and the United States. The company was formerly known as Sylvan Learning Systems, Inc. and changed its name to Laureate Education, Inc. in May 2004. Laureate Education, Inc. was founded in 1989 and is headquartered in Miami, Florida.