r/VisualStockResearch

I understand the obvious answer: growth has slowed.

But Duolingo is still growing revenue ~18%, DAUs grew 23%, the business is profitable and subscription revenue continues to compound at a very high rate.

Look at the chart below. Subscription revenue alone has gone from roughly $85M/quarter to $258M/quarter in about 3 years.

The biggest issue seems to be that management is intentionally prioritizing user growth over near-term monetization. That means slower bookings growth today, but potentially a much larger user base to monetize later.

The market clearly hates that tradeoff.

I understand DUOL deserved a valuation reset from where it was trading when revenue was growing 40%+, but at some point the question becomes:

How much of the slowdown is already priced in?

You still have:

• 23% DAU growth
• ~18% revenue growth
• a profitable business
• recurring subscription revenue
• extremely strong retention/engagement
• management expecting 20%+ DAU growth through the rest of 2026

Maybe I’m missing something, but the decline seems excessive relative to what has actually happened to the underlying business.

What’s the bear case from here?

The market seems high but there is still a lot of value.

What is your number 1 pick?

Berkshire increased its Alphabet position by more than 200% while also opening a separate GOOG stake. With Alphabet now around 17% below its 52-week high, Buffett appears to be leaning into the dip.

After Ackman bought, I would assume there may be some buyers

I want to jump in, but not sure where I would fund it. I have a little bit of cash but would need to sell something to grab some shares

Any takers?

These are three companies I’m currently adding to, for very different reasons.

Reddit — The highest-growth name of the three. The combination of user growth, improving monetization and rapidly expanding profitability is what interests me most. The big question is how much of that growth can be sustained as the business scales.

Uber — Probably the most balanced of the three. The platform is still growing trips and bookings around 20% while earnings and cash flow are growing much faster. I also think the long-term AV opportunity is interesting.

Adobe — Almost the opposite thesis. The market is extremely worried about AI disruption, while the underlying business is still growing double digits. I’m buying it more as a valuation/AI pessimism play than a high-growth play.

I don’t expect all three to perform the same way, but I like the risk/reward for different reasons.

If you had to pick just one to own for the next 5 years, which would it be?

Pershing Square announced six new investments:

Visa
Mastercard
Netflix
S&P Global
Intercontinental Exchange
Alcon

One interesting one is Netflix. Ackman previously owned Netflix, sold the position in 2022, and is now buying back in.

Of the six, the three I have shown here — Netflix, Mastercard and S&P Global — are the ones I think have the most upside.

I view Visa and Mastercard as essentially the same thesis, so I only included Mastercard in the chart.

Since 2017:

Netflix revenue: ~$11B → ~$47B
CAGR: 19.1%

Mastercard revenue: ~$11B → ~$34B
CAGR: 13.3%

S&P Global revenue: ~$5.8B → ~$16B
CAGR: 12.1%

The overall theme is pretty clear: high-quality businesses with strong competitive positions, recurring revenue and long runways for earnings growth.

Pretty interesting group of companies to add all at once.

Which of the six do you think has the most upside?

Tesla and Ford now generate revenue on a completely different scale than they did a decade ago.

Tesla TTM revenue: ~$98B
Ford TTM revenue: ~$190B
Tesla revenue CAGR: ~30%
Ford revenue CAGR: ~2.5%

But the valuation gap is even crazier:

Tesla market cap: ~$1.3T
Ford market cap: ~$59B
Tesla is worth ~22x Ford despite generating roughly half the revenue

Obviously Tesla is being valued on much more than its current auto business, but this really shows how much future growth is already priced in.

Kind of interesting that three of the biggest names in digital advertising all sold off hard after their most recent earnings.

APP:
Revenue +53% YoY
Adjusted EBITDA +58%
Stock fell ~19% the next day

RDDT:
Revenue +61% YoY
Revenue beat expectations by ~10%
Q3 guidance also beat expectations
Stock fell ~21% the next day

META:
Revenue +28% YoY
Advertising revenue +27%
Ad impressions +14%
Stock fell ~10% after earnings

Obviously there were reasons for each selloff. AppLovin had a slight miss and concerns around its AI model rollout, Reddit had concerns around user growth/growth deceleration, and Meta had weaker earnings and massive spending.

But it’s still pretty wild seeing companies growing revenue 28%, 53% and 61% all get hit this hard immediately after earnings.

Seems like expectations across digital advertising were incredibly high going into this quarter.

SoFi just reported another really strong quarter, and the growth is becoming pretty hard to ignore.

• Revenue: $1.22B, +43% YoY
• Adjusted EBITDA: $358M, +44%
• Net income: $157M, +61%
• Members: 15.8M, +35%
• Products: 24.4M, +42%
• Loan originations: $14.8B, +69%
• Deposits: $45.5B
• Fee-based revenue: $472M, now 39% of total revenue

The part that stands out to me is the cross-selling.

51% of new products were opened by existing members, up from 35% a year ago. SoFi isn't just acquiring customers... existing customers are increasingly using more of the platform.

And the revenue mix has completely changed.

Financial Services generated $466M this quarter, compared with almost nothing a few years ago, while Lending still grew to $725M.

The weak spot continues to be Technology Platform, which fell 23% YoY to $85M.

But overall, you're looking at a company growing revenue ~40%, members 35%, products 42%, and still expanding profits at the same time.

The chart really shows how different SoFi looks today versus just a few years ago.

Is SoFi starting to prove the financial super-app thesis, or is the valuation already pricing this in?

Meta is projected to grow EPS around 20% annually over the next few years, and that is before its newer business lines become meaningful contributors.

Zuckerberg has discussed opportunities across AI APIs, cloud infrastructure, business messaging, AI agents and wearables. Meta is still primarily valued as an advertising company, but it is building several potentially massive, high-margin revenue streams on top of that core business.

If advertising remains strong and even one or two of these new businesses gain traction, I could easily see Meta sustaining a 30x P/E.

At 20% annual earnings growth and a move from 24x to 30x earnings, the stock could return roughly 25% annually over five years.

The biggest question: Does Meta deserve a premium multiple if it successfully expands beyond advertising?

Utilities could become an interesting contrarian opportunity again.

The Utilities sector’s Forward P/E is currently trading below its 5-year average. At a time when other areas of the equity market are attracting significantly more attention, we believe the sector may be worth a closer look.

In our view, Utilities could be particularly interesting from a contrarian perspective, while also fitting well as a defensive component within a broadly diversified portfolio. Relatively stable business models and less cyclical demand can provide an attractive counterbalance to more growth-oriented and cyclical exposures.

Of course, a more attractive sector valuation does not mean that every stock within the sector is cheap. Careful stock selection remains essential.

Nevertheless, we believe it can be especially worthwhile to take a closer look when a sector is not in the spotlight. These are often the periods when interesting contrarian opportunities can emerge.

What are your thoughts on the Utilities sector? Could it be an attractive defensive addition to a diversified portfolio?

This is not investment advice. #stocks

Duolingo’s earnings were better than the headline growth suggests

I own Duolingo, so this is one I was paying pretty close attention to.

The biggest thing that stood out to me was that user growth actually accelerated again, while bookings growth continues to be the main concern.

Revenue: $298.5M, +18%
Bookings: $289.1M, +8%
Subscription bookings: $250.3M, +10%
DAUs: 58.7M, +23%
MAUs: 140.6M, +10%
Paid subscribers: 12.7M, +17%
Gross margin: 72.6%
Adjusted EBITDA: $77.3M
Adjusted EBITDA margin: 25.9%

The DAU number is probably what I liked most.

DAU growth accelerated from 21% last quarter to 23% this quarter, and management expects it to stay above 20% for the rest of the year. Retention also reached an all-time high.

The obvious concern is bookings.

Revenue grew 18%, but bookings only grew 8%. That’s a pretty big gap and something I’ll be watching closely. Q3 guidance also calls for only about 9% bookings growth.

Margins are down too, but I’m less worried about that.
Duolingo has been pretty clear that they’re intentionally prioritizing user growth, retention and product investment over maximizing near-term monetization.

For me, the question is pretty simple:

If DAUs keep growing 20%+ and paid subscribers keep growing double digits, can Duolingo eventually get bookings growth accelerating again?

As a shareholder, I’m happy to see them prioritize growing the platform right now. But at some point, that user growth needs to translate into faster bookings growth.

I don’t usually post about companies when things are going this badly, but Trade Desk is a tough one right now.

- Revenue: $715M, up just 3%
- Q2 2025 growth: 19%
- Q2 2024 growth: 26%
- Management had guided for at least $750M
- Q3 guidance: at least $650M

TTD was a company that consistently grew 20%+ for years. Now revenue growth has gone from 26% to 19% to 3%.

The ad market can be cyclical, but other digital ad companies are still putting up solid growth. That makes it harder to blame all of this on the market.

The Q3 guide is probably the worst part. One bad quarter happens. Guiding for an even weaker quarter is a lot tougher.

Brutal quarter

To add on to my post from a couple days ago about Uber’s underlying growth being much stronger than the 12% revenue headline, I went through the earnings call and a few other things stood out:

• Mobility bookings grew 20%, with operating income up 28%
• Delivery bookings grew 25%, with operating income up 38%
• Grocery/Retail is now at a ~$15B annualized bookings run rate and growing ~40%
• Advertising passed a $2.5B annualized run rate and is still growing ~50%
• TTM free cash flow crossed $10B

But management probably spent the most time emphasizing AVs.

Uber is already live with AVs in 7 cities, expects up to 15 by year-end, and partners have committed ~120k vehicles.

Dara’s argument is basically that Uber doesn’t need to build the winning AV. They want to be the distribution layer for whoever does.

Interestingly, Uber also said its market share in SF, LA and Phoenix — some of the most developed AV markets — is actually higher than it was a year ago.

Still a lot of uncertainty around AVs, but management clearly thinks it can become an opportunity for Uber rather than a threat.

If you are a stock investor and follow Buffett's philosopy, you want to identify quality businesses that are undervalued. We have built a chart to show both at the same time with quality on the y-axis and value on the x-axis.

So, the chart splits into four quadrants: high quality at a low multiple, which is the corner most people are after, high quality at a high multiple, low quality at a low multiple, and low quality at a high multiple. Plot return on invested capital against enterprise value to sales, for example, and every company lands in one of those four.

We have set up nine ready-made combinations of metrics for you to chose from. However, you can also manually select from 37 financial metrics.

The toggle at the top right switches between two modes. The first is raw numbers, which compares across the whole market. The second replaces both numbers with a rank from 0 to 100 against the company's own sector (peer percentiles).

Many investors are underestimating a crucial factor: corporate profitability.

This is where one of the biggest differences could lie.

While many investors argue that the market is too expensive based on its current forward P/E, corporate net margins remain near historically high levels — and this is not exclusively driven by mega-cap technology companies, but can also be observed across the broader S&P 500.

This is often overlooked.

Of course, there is an important distinction: the chart shows currently realized net margins, while the forward P/E is based on expected future earnings. Nevertheless, margins provide an important indication of how efficiently companies are operating today — and how much potential they have to expand future earnings.

A valuation multiple should always be viewed in the context of future earnings growth and profitability. If companies can maintain these elevated margins, earnings can grow faster than many investors currently expect.

If revenues remain stable or continue to grow, expanding margins can further support earnings growth and allow profits to increase significantly faster than many currently anticipate. This could allow today’s valuation multiple to normalize faster than the forward P/E alone might suggest.

The key question, therefore, is not only whether the forward P/E is high.

The bigger question is whether companies can sustainably maintain their currently exceptional net margins — and whether revenue growth and further efficiency gains can drive additional earnings expansion.

Because if that happens, today’s forward P/E could normalize as earnings catch up faster than many investors currently expect.