Analyzing Snowflake (NYSE:SNOW) and Duolingo (NASDAQ:DUOL)

Duolingo (NASDAQ:DUOL) and Snowflake (NYSE:SNOW) are both large-cap business services companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, earnings, profitability and risk.

Analyst Ratings

This is a breakdown of current recommendations for Duolingo and Snowflake, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Duolingo	0	6	6	1	2.62
Snowflake	1	10	27	0	2.68

Duolingo presently has a consensus price target of $352.40, suggesting a potential upside of 1.06%. Snowflake has a consensus price target of $184.46, suggesting a potential upside of 6.87%. Given Snowflake’s stronger consensus rating and higher possible upside, analysts plainly believe Snowflake is more favorable than Duolingo.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Duolingo	12.59%	11.74%	7.92%
Snowflake	-33.02%	-24.23%	-13.30%

Risk and Volatility

Duolingo has a beta of 0.85, indicating that its stock price is 15% less volatile than the S&P 500. Comparatively, Snowflake has a beta of 1.03, indicating that its stock price is 3% more volatile than the S&P 500.

Institutional and Insider Ownership

91.6% of Duolingo shares are owned by institutional investors. Comparatively, 65.1% of Snowflake shares are owned by institutional investors. 18.3% of Duolingo shares are owned by insiders. Comparatively, 7.8% of Snowflake shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Duolingo	$689.46 million	22.25	$16.07 million	$1.83	190.56
Snowflake	$2.81 billion	20.30	-$836.10 million	($3.39)	-50.91

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

Summary

Duolingo beats Snowflake on 10 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 Snowflake

Snowflake Inc. provides a cloud-based data platform for various organizations in the United States and internationally. Its platform offers Data Cloud, which enables customers to consolidate data into a single source of truth to drive meaningful business insights, build data-driven applications, and share data and data products, as well as applies artificial intelligence (AI) for solving business problems. The company was formerly known as Snowflake Computing, Inc. and changed its name to Snowflake Inc. in April 2019. Snowflake Inc. was incorporated in 2012 and is based in Bozeman, Montana.