Updated December 6, 2025
Duolingo, Inc. (NASDAQ: DUOL) is ending 2025 in full drama-queen mode.
The language-learning and edtech platform has just delivered another quarter of explosive growth — 41% revenue growth, record profitability and more than 50 million daily active users — and yet its share price is trading around $200, roughly 60–65% below its May 2025 peak above $540. [1]
Investors are trying to reconcile three things at once:
- still-hyper growth,
- a strategic shift towards “teaching quality” over pure monetization,
- and a valuation that has compressed hard from bubble-ish to merely expensive.
Here’s a deep dive into the latest numbers, AI roadmap, and what Wall Street thinks happens next.
Duolingo stock today: price, volatility, and 2025 reset
As of early trading on December 6, 2025, Duolingo stock is changing hands at about $199.75, up around 6% from the prior close, with intraday trading between roughly $187 and $201. [2]
That price sits on top of a wild year:
- After a monster run into May 2025, when DUOL traded above $540, the stock has since fallen by around two‑thirds from that high, including a 40%+ drop in the last month alone, according to European financial press coverage. [3]
- Several outlets note that Duolingo shares are down 50–65% from mid‑year levels, depending on the window you pick (six months vs. since June). [4]
Valuation has also reset:
- Back in August, Reuters highlighted that Duolingo was trading at more than 85× forward earnings expectations, well above other internet names such as Uber and DoorDash. [5]
- More recent estimates from data aggregators put Duolingo on a forward P/E in the mid‑20s based on 2026 earnings forecasts — still a growth multiple, but far from the nosebleed levels earlier in the year. [6]
Price and valuation have come down. The question for 2026 is whether growth decelerates to match, or whether the business grows back into its old hype.
Business snapshot: from language app to multi‑subject learning platform
Duolingo started as a free language-learning app and has evolved into a broader learning platform:
- Freemium model: core content is free with ads; most revenue comes from paid subscriptions that remove ads and unlock perks such as unlimited “energy/hearts” and AI-powered features. [7]
- Other revenue streams: in‑app purchases of virtual currency, plus the Duolingo English Test, a lower-cost English proficiency exam used by universities and employers. [8]
- New subjects: Duolingo now offers math, music and chess alongside languages, positioning itself increasingly as a broad consumer edtech platform rather than just a language app. [9]
Financially, the growth arc has been steep:
- Revenue climbed from $531 million in 2023 to around $748 million in 2024, and Wall Street now expects about $1.05 billion in 2025, a ~40% jump. [10]
- Paying subscribers reached 10.9 million by mid‑2025 and have since risen to around 11.5 million. [11]
So yes, the green owl is still growing aggressively — which makes the 2025 stock collapse more interesting than a simple “growth is dead” story.
Q2 2025: AI‑fuelled euphoria and a vertical take‑off
The first half of 2025 looked like the perfect growth stock script.
In Q2 2025, Duolingo:
- Grew revenue 41% year-on-year to $252.3 million.
- Delivered adjusted EPS of $0.91 vs. $0.58 expected.
- Boosted bookings by 41%.
- Increased daily active users (DAUs) by 40% to 47.7 million.
- Lifted paid subscribers 37% to 10.9 million. [12]
Management used those results to raise full‑year 2025 guidance for bookings, adjusted EBITDA, and revenue to a range around $1.01–$1.02 billion, up from just under $1 billion previously. [13]
Two things powered the optimism:
- AI‑powered tiers
Duolingo’s premium “Max” tier, which includes AI‑based conversation practice via video calls, helped lift average revenue per user by about 6% in Q2 as users upgraded to higher-priced subscriptions. [14] - Record profitability, despite AI costs
AI features initially pushed gross margin down by roughly one percentage point vs. the prior year, but this was less than the drop management had feared because the cost of calling AI models fell faster than expected. [15]
Investors loved it. Q2 coverage from Reuters and others highlighted a 30–35% single‑day surge in the stock after earnings and guidance, adding billions to Duolingo’s market cap. [16]
By mid‑August, though, some analysts were already starting to question whether AI competition from large tech firms might eventually cap Duolingo’s total addressable market. In response, KeyBanc upgraded the stock to “overweight” with a $460 target, arguing that AI fears were “overblown” and that the company’s product changes and viral marketing remained powerful growth drivers. [17]
Q3 2025: another beat, and a brutal reset on bookings
Fast‑forward to Q3 2025, and the headline numbers were, again, excellent:
- Revenue: $271.7 million, up 41% year-on-year and ahead of estimates around $260 million.
- Bookings: up 33% year-on-year (31% on a constant-currency basis).
- Daily active users: 50.5 million, up 36% year-on-year.
- Paid subscribers: 11.5 million, up 34%.
- Adjusted EBITDA: about $80 million, a 29.5% margin, up roughly five percentage points vs. last year. [18]
Duolingo raised full‑year 2025 revenue guidance again, this time to roughly $1.028–$1.032 billion, and reiterated expectations for bookings to grow about 33% for the year. [19]
Earnings per share exploded to $5.95, massively above consensus forecasts around $0.70 — but primarily because of a one‑off $222.7 million tax valuation allowance release that boosted net income in the quarter. [20]
On the surface, this looked like another victory lap. The market disagreed.
The bookings guidance that broke the momentum
The problem was the Q4 bookings outlook.
- Management guided Q4 2025 bookings to $329.5–$335.5 million, below analyst expectations of roughly $343.6 million. [21]
- Q4 EBITDA guidance of $75.4–$78.8 million also undercut analyst estimates near $80.4 million. [22]
Duolingo explained that it is re‑balancing its priorities toward improving teaching quality and long‑term user value, even if that means less aggressive near-term monetization. CEO Luis von Ahn explicitly told Reuters that the company would still work on monetization but spend more relative effort on instruction quality than in the recent past. [23]
Wall Street’s reaction:
- Reuters reported a 20% after‑hours plunge on the day of the Q3 release. [24]
- Barron’s noted the stock was down around 25% in premarket trading, leaving shares about 50% below June levels despite the strong earnings prints. [25]
- Spanish financial daily Cinco Días later described Duolingo as being in a “crisis on the stock market,” with the shares dropping more than 40% in a month and almost two‑thirds from the May peak, as banks cut price targets on concerns about slower growth. [26]
In other words: the business is still on fire, but investors are repricing what “hyper‑growth” should mean.
Duocon 2025, LinkedIn, chess and AI video calls: the product roadmap
While markets obsesses over bookings, Duolingo has been busy evolving the product.
At its Duocon 2025 event in September, the company unveiled several updates that push it deeper into “real‑world utility” and beyond pure language drills:
LinkedIn integration: making language skills a credential
Duolingo launched a Duolingo Score integration with LinkedIn, allowing users to display their language proficiency directly on their profile, with scores that update automatically as they improve in the app. [27]
This moves Duolingo’s language scores closer to a quasi‑credential — a small but symbolically important step towards capturing more professional and academic use cases.
Chess as a learning subject
The company expanded its Duolingo Chess course:
- Chess learning is now available on Android, and
- A player‑versus‑player mode rolled out on iOS to make practice more interactive. [28]
Coverage from MarketWatch and others has highlighted how rapidly the chess course reached over 1 million daily users, illustrating Duolingo’s ability to transplant its game‑like learning model into new subjects. [29]
AI‑powered video calls and “Lily” conversations
Duolingo has also been deepening its AI conversation tools:
- An AI‑powered Video Call feature, initially added to the Max subscription earlier in 2025, was expanded to more courses and platforms, with real‑time feedback and post‑call reviews. [30]
- Duocon 2025 showcased enhanced speaking practice with the character “Lily”, bringing conversational AI into more language courses for Max subscribers. [31]
A recent analysis from Simply Wall St, republished via Sahm Capital, argues that Duolingo’s AI‑driven English‑learning push could help better monetize what is still a largely under‑monetized user base, potentially reshaping the long‑term revenue opportunity if conversion into premium tiers improves. [32]
Social media, AI backlash and the “edgy owl” problem
Another storyline in 2025: Duolingo discovered that going viral cuts both ways.
- In the spring, CEO Luis von Ahn posted an internal “AI‑first” memo on LinkedIn, explaining that AI fluency would factor into hiring and promotion decisions and that some contractor roles would be replaced by AI. [33]
- The memo triggered backlash on social media, with concerns about job losses and “AI slop” in the app. Duolingo temporarily wiped its social accounts and toned down its famously “edgy” meme‑driven marketing. [34]
On the Q2 call, von Ahn admitted that easing off viral content hurt DAU growth, which landed at 40% year-on-year — the low end of the company’s own 40–45% forecast range — especially in the U.S. and Canada. [35]
The company has since tried to bring back some of the personality while staying more cautious around AI messaging. It’s a useful reminder that when your brand leans heavily on internet culture, communication risks become financial risks.
Analyst forecasts: still bullish on the long term, but targets are coming down
Despite the stock’s brutal drawdown, Wall Street consensus remains broadly positive on Duolingo.
Price targets and ratings
Data from StockAnalysis and MarketBeat show:
- Around 15–23 analysts actively cover DUOL. [36]
- The consensus rating is “Buy.” [37]
- Average 12‑month price targets cluster around $330–$340, implying roughly 60–70% upside from the current ~$200 share price.
However, those averages hide a clear downward shift in targets after the Q3 guidance shock:
- DA Davidson cut its target from $220 to $205 on December 3, maintaining a Neutral/Hold stance. The firm flagged that shares have fallen over 60% in six months and noted that its own tracking of Duolingo users shows DAU growth slowing to about 29% year-on-year in October and November — still strong, but below earlier 40%+ levels. [40]
- In early November:
- Goldman Sachs cut its target from $425 to $250 (Hold).
- JPMorgan trimmed from $465 to $300 (Buy).
- Citigroup lowered from $375 to $270 but kept a Strong Buy stance. [41]
Even after those cuts, most targets remain well above the current price, but the tightening bands reflect more skepticism about sustaining 30–40%+ growth indefinitely.
Revenue, earnings and free‑cash‑flow outlook
Consensus forecasts sketched by StockAnalysis and Simply Wall St paint the following picture:
- Revenue
- 2024: about $748 million (actual).
- 2025: about $1.05 billion, ~40% growth.
- 2026: around $1.29 billion, another ~23% increase. [42]
- EPS (GAAP, consensus)
- 2024: $1.88.
- 2025: $7.72, heavily boosted by the one‑time Q3 tax benefit.
- 2026: $4.42, as that tax effect rolls off. [43]
- Free cash flow and intrinsic value
- Simply Wall St estimates Duolingo’s latest free cash flow at about $341.6 million, potentially rising to $629.9 million by 2027 and $1.2 billion by 2035 if growth trends hold. [44]
- A discounted cash flow (DCF) model there pegs fair value around $481.54 per share, implying about 60% upside, while some narrative‑based models described by the same service suggest fair value estimates between roughly the mid‑$200s and low‑$600s. [45]
Other research, including recent commentary from Zacks, frames Duolingo as a long‑term free‑cash‑flow story, but notes that the share price has fallen on the order of two‑thirds in six months, underlining the gap between fundamentals and sentiment. [46]
In short: models that assume sustained high‑20s revenue growth and strong margin expansion tend to see DUOL as materially undervalued; models that normalize growth faster see less upside.
Key debates around Duolingo stock
With Q3 and Duocon out of the way, investors are arguing over a few main points.
1. Bookings growth vs. “teaching quality”
Management is explicitly shifting some focus from aggressive monetization experiments to improving teaching quality and learning outcomes, even if that means weaker short‑term bookings. [47]
If that trade‑off:
- deepens engagement and keeps users in the ecosystem longer, it may justify a premium multiple and support conversion to higher‑priced tiers later;
- fails to boost retention materially, the market may conclude that 30–40% bookings growth was a temporary spike, not a sustainable trajectory.
Q4 2025 will be the first real test of this new balance, with guidance implying high‑teens bookings growth versus the low‑30s pace investors had gotten used to. [48]
2. Monetizing AI without destroying margins
The good news:
- AI‑powered features like Duolingo Max and Video Call with Lily are already profitable, according to management, and have helped lift ARPU. [49]
- AI inference costs are falling, supporting Duolingo’s 72–73% gross margin in recent quarters, slightly ahead of what analysts had penciled in. [50]
The open questions:
- How much pricing power does Duolingo really have as generative AI tutors proliferate (including free or low‑cost tools from big tech players)? [51]
- Will AI make Duolingo’s moat stronger (through better learning outcomes and stickier experiences) or weaker (if generic AI chatbots become “good enough” for basic language practice)?
So far, most analysts seem to lean toward the “AI is a net positive” camp, but DA Davidson’s and other recent target cuts show that patience for missteps is limited. [52]
3. Expansion beyond languages: math, music and chess
Duolingo’s expansion into math, music and chess is still in relatively early days but has some notable traction:
- The chess course has quickly amassed over 1 million daily users. [53]
- Product strategy pieces from the company and third‑party research repeatedly describe Duolingo as evolving into a broader consumer learning super‑app. [54]
The bull case is that these new subjects:
- boost lifetime value per user,
- create cross‑sell opportunities, and
- support premium bundles (e.g., Max bundles covering multiple subjects).
The bear case is that these new areas may never monetize as well as language learning, or may distract from the core product.
4. Geographic growth and China exposure
Q3 results highlighted China as a standout region, aided by Duolingo’s partnership with Luckin Coffee, which boosted brand visibility and helped drive paid subscriber growth. [55]
International growth is a double‑edged sword:
- It expands Duolingo’s addressable market and diversifies revenue,
- but introduces additional regulatory, data and competitive risks — especially in markets where local education and test‑prep players are strong.
What to watch in the next 6–12 months
For investors tracking Duolingo into 2026, a few metrics and milestones will matter most:
- Bookings growth vs. Q4 guidance
Does Q4 2025 deliver the 18–20% bookings growth implied by guidance, or does growth undershoot again? That will heavily influence how credible the full‑year 2026 forecasts look. [56] - DAU and paid subscriber trends
After DAU growth slowed from mid‑40s to high‑30s and now high‑20s (per DA Davidson’s tracking), the direction of that trend will signal whether the social media and product shifts are helping or hurting engagement. [57] - Max tier adoption and ARPU
Watch for updates on how many users are adopting Max, how often they use AI features like Video Call, and whether ARPU can keep climbing without heavy discounting. [58] - Margins and AI costs
If gross margins stay in the low‑70s while Duolingo invests aggressively in AI features, it strengthens the thesis that AI is incrementally profitable rather than a margin drag. [59] - New verticals and partnerships
Expect more data points on:- Math, music and chess engagement,
- LinkedIn and other credential-style partnerships,
- and potential expansions of the Duolingo English Test or other assessment products. [60]
Bottom line: high‑quality business, high‑volatility stock
Right now, Duolingo looks like a classic high‑growth, high‑volatility story:
- Operationally, it’s delivering 40%‑ish revenue growth, expanding profitability, and rapid innovation in AI‑driven learning and new subjects. [61]
- Strategically, it’s betting that better teaching quality and AI‑enhanced experiences will support monetization over a longer horizon, even at the cost of softer near‑term bookings growth. [62]
- In the market, it has gone from an 85×-earnings darling to a stock many valuation models now call undervalued, even as others warn that growth assumptions remain aggressive. [63]
Anyone analysing DUOL now has to pick a narrative: either the post‑Q3 selloff is an overreaction to a temporary bookings wobble, or it’s the beginning of a longer normalization in growth and multiples.
Either way, this is information, not investment advice. The numbers and forecasts above come from public filings and third‑party research; making actual portfolio decisions still requires your own risk tolerance, time horizon, and independent judgment.
References
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