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Dutch Bros has grown trailing revenue by 243% since its 2021 IPO while expanding from 503 to over 1,000 locations.
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Duolingo posted 41% year-over-year revenue growth and 51% higher free cash flow in its latest quarter.
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Both stocks are down by at least 26% from yearly highs, and some of their valuation multiples look affordable.
Growth stocks don’t always come with helpful neon-sign guidance. Sometimes they’re busy doubling revenue, racking up loyal customers, and printing cash while the Street fixates on shinier objects.
Here are two names I think deserve a closer look today.
Dutch Bros (NYSE: BROS) is a classic growth story with a couple of unexpected twists.
First and foremost, the company is optimized for maximal revenue growth. Trailing-12-month sales are up by 243% since Dutch Bros entered the public stock market in September 2021. The compound annual growth rate (CAGR) in this four-year span is 36%. By contrast, rival coffee chain Starbucks saw just a 6.4% top-line CAGR in the same period.
Dutch Bros is stomping on the gas pedal by building a ton of new locations. Before the 2021 initial public offering (IPO), the company was a popular staple around the West Coast, with 503 active locations. The $521 million net proceeds from the IPO were used to expand the store network. Alongside a secondary stock offering in 2023, Dutch Bros jumped from 11 states to 1,081 shops across 24 states in September 2025.
Despite favoring company-owned locations over franchise agreements, this coffee chain can grow faster than most due to its focus on drive-thru operations. That’s the secret sauce in Dutch Bros’ rapid growth plans.
Sure, every location has a walk-up ordering window, but there’s almost never an indoor seating area or a lot of parking spaces. This design promotes quick transactions, but also results in a smaller physical footprint. That’s quick and cheap to build, with minimal maintenance costs.
But the company’s ambitious strategy and steady stream of analyst-stumping earnings reports haven’t driven the stock to market-stomping gains. As of Dec. 22, share prices are down 26% from February’s all-time highs. About 11% of the stock is sold short, as an above-average portion of Dutch Bros investors expect price drops instead of gains. And the price-to-earnings-to-growth ratio (PEG) is a fairly reasonable 1.8 today.
So I would argue that Wall Street is missing out on Dutch Bros, even if the stock trades at rich price-to-earnings multiples. The coffee chain earned its price tag via high-octane sales growth — and then some.
Duolingo (NASDAQ: DUOL) is basically a pocket-sized polyglot with a business degree. The gamified language app has grown into a real subscription machine over the years.
In the recent third-quarter report, Duolingo continued its breathless growth. Revenue rose 41% year over year to about $272 million. The online learning service sported 135 million monthly active users (MAUs) and 11.5 million paid subscribers, both up approximately 35%. At the same time, free cash flow soared 51% to $77.4 million — 28% of revenues. The green owl is becoming a cash machine.
Still, the stock got dinged with a 25% price drop the next day, as management prioritized teaching efficacy and user growth over short-term order bookings. Those are good priorities with a long-term focus, but the market makers disagree.
Despite the official strategy update, Duolingo’s product keeps getting smarter and more effective. The premium Duolingo Max subscription plan comes with several artificial intelligence (AI) features. Engagement metrics are soaring. The proportion of users who prefer Duolingo’s ad-free subscriptions over the free service is rising. And the company keeps adding more courses outside its classic language focus.
I don’t know what might come next after the fairly recent introductions of music, chess, and basic math, but the sky is the limit (especially in the AI-driven Duolingo Max plan).
At the same time, the stock is down 66% from the record prices it reached last spring. Shares are changing hands at unreasonably reasonable valuation multiples: 23.5 times trailing earnings and 24 times free cash flow. That’s a bargain for this skyrocketing online educator. Somehow, 14% of Duolingo investors expect a continued price drop and continue to sell the stock short.
In other words, Wall Street may be napping on the long-term monetization story while millions of users keep opening the app every day. Maybe I’m biased, with my own active Duolingo stream of 3,465 days (or about 9.5 years). But if you want a consumer-subscription growth story with real unit economics and an AI tailwind, Duolingo earns a double-tap.
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Anders Bylund has positions in Duolingo. The Motley Fool has positions in and recommends Duolingo and Starbucks. The Motley Fool recommends Dutch Bros. The Motley Fool has a disclosure policy.
2 Growth Stocks Wall Street Might Be Sleeping On, but I’m Not was originally published by The Motley Fool