Analyzing Acuity (NYSE:AYI) and Duolingo (NASDAQ:DUOL)

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

Volatility and Risk

Acuity has a beta of 1.31, indicating that its stock price is 31% more volatile than the S&P 500. Comparatively, Duolingo has a beta of 0.89, indicating that its stock price is 11% less volatile than the S&P 500.

Valuation and Earnings

This table compares Acuity and Duolingo”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Acuity	$4.35 billion	2.10	$396.60 million	$13.64	22.04
Duolingo	$1.04 billion	5.29	$414.07 million	$8.69	13.56

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

Analyst Ratings

This is a summary of current ratings and price targets for Acuity and Duolingo, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Acuity	0	4	5	0	2.56
Duolingo	2	17	3	0	2.05

Acuity currently has a consensus price target of $369.17, suggesting a potential upside of 22.82%. Duolingo has a consensus price target of $197.61, suggesting a potential upside of 67.67%. Given Duolingo’s higher probable upside, analysts plainly believe Duolingo is more favorable than Acuity.

Institutional and Insider Ownership

98.2% of Acuity shares are held by institutional investors. Comparatively, 91.6% of Duolingo shares are held by institutional investors. 2.9% of Acuity shares are held by company insiders. Comparatively, 16.6% of Duolingo shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Acuity	9.37%	20.74%	12.20%
Duolingo	38.44%	14.07%	9.45%

Summary

Acuity beats Duolingo on 9 of the 14 factors compared between the two stocks.

About Acuity

Acuity Brands, Inc. provides lighting, lighting controls, building management system, location-aware applications in the United States and internationally. The company operates in two segments, Acuity Brands Lighting and Lighting Controls (ABL); and the Intelligent Spaces Group (ISG). The ABL segment provides commercial, architectural, and specialty lighting solutions, as well as lighting controls and components for various indoor and outdoor applications under the A-Light, Aculux, American Electric Lighting, Cyclone, Dark to Light, eldoLED, Eureka, Gotham, Healthcare Lighting, Holophane, Hydrel, Indy, IOTA, Juno, Lithonia Lighting, Luminaire LED, Luminis, Mark Architectural Lighting, nLight, OPTOTRONIC, Peerless, RELOCWiring Solutions, and Sensor Switch. This segment serves electrical distributors, retail home improvement centers, electric utilities, national accounts, original equipment manufacturers, digital retailers, lighting showrooms, and energy service companies. The ISG segment offers building management solutions, such as products for controlling heating, ventilation, air conditioning, lighting, shades, refrigeration, and building access that deliver end-to-end optimization of those building systems; and building management software that enhances building system management and automates labor intensive tasks. This segment serves system integrators, as well as retail stores, airports, and enterprise campuses. The company offers its products and solutions under the Atrius, Distech Controls, and KE2 Therm Solutions brands. Acuity Brands, Inc. was incorporated in 2001 and is headquartered in Atlanta, Georgia.

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.