Shares of the language learning company Duolingo (DUOL +1.92%) fell by 9.8% this week, according to data provided by S&P Global Market Intelligence, as investors grow increasingly concerned about AI disruption.
Duolingo will report its second-quarter 2026 results early next month, and shareholders could be paring back their holdings now, in anticipation of a rough quarter.
Image source: The Motley Fool.
AI has Duolingo investors worried Duolingo's share price has nosedived over the past year, falling 66% as investors have become increasingly concerned that AI will disrupt Duolingo's business model.
Shareholders may have reacted this week to news that a yet-to-be-released OpenAI ChatGPT model went rogue and hacked a website. OpenAI was testing the model for its cybersecurity capabilities, and it broke free of its contained sandbox environment in search of the test answers.
Duolingo isn't a cybersecurity company, but its shareholders are already concerned that AI companies could disrupt the company's language learning and education app. A highly capable ChatGPT doesn't instill confidence that Duolingo can fend off AI competition.
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Shareholders may be bracing for Duolingo's quarterly results Duolingo is investing more in AI features to stay relevant, but it's coming at a cost. Management said gross margins will fall to 69% by the end of this year as AI-driven costs rise.
Duolingo has set a goal of 100 million daily active users in 2028 and is willing to sacrifice some higher margins to get there.
Investors will find out more about how well the company is achieving its goals when Duolingo reports its second-quarter results on Aug. 5. Still, it's clear from the share price declines this week that Duolingo has a lot to prove before regaining investor confidence.
Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Duolingo. The Motley Fool has a disclosure policy.
In the latest trading session, Duolingo, Inc. (DUOL - Free Report) closed at $124.71, marking a -6.86% move from the previous day. This change lagged the S&P 500's daily gain of 0.89%. Meanwhile, the Dow gained 0.74%, and the Nasdaq, a tech-heavy index, added 1.29%.
Shares of the company witnessed a gain of 5.22% over the previous month, beating the performance of the Business Services sector with its gain of 4.27%, and the S&P 500's loss of 0.63%.
Market participants will be closely following the financial results of Duolingo, Inc. in its upcoming release. The company plans to announce its earnings on August 5, 2026. The company is expected to report EPS of $0.61, down 32.97% from the prior-year quarter. Alongside, our most recent consensus estimate is anticipating revenue of $297.2 million, indicating a 17.81% upward movement from the same quarter last year.
For the full year, the Zacks Consensus Estimates are projecting earnings of $2.81 per share and revenue of $1.2 billion, which would represent changes of -67.21% and +16.1%, respectively, from the prior year.
Any recent changes to analyst estimates for Duolingo, Inc. should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.65% higher. Right now, Duolingo, Inc. possesses a Zacks Rank of #2 (Buy).
Investors should also note Duolingo, Inc.'s current valuation metrics, including its Forward P/E ratio of 47.7. For comparison, its industry has an average Forward P/E of 16.53, which means Duolingo, Inc. is trading at a premium to the group.
We can also see that DUOL currently has a PEG ratio of 1.02. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Technology Services was holding an average PEG ratio of 1.44 at yesterday's closing price.
The Technology Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 99, putting it in the top 41% of all 250+ industries.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
Investors looking for stocks in the Technology Services sector might want to consider either Duolingo, Inc. (DUOL - Free Report) or Amplitude, Inc. (AMPL - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Currently, Duolingo, Inc. has a Zacks Rank of #2 (Buy), while Amplitude, Inc. has a Zacks Rank of #3 (Hold). This means that DUOL's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
DUOL currently has a forward P/E ratio of 47.70, while AMPL has a forward P/E of 208.51. We also note that DUOL has a PEG ratio of 1.02. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. AMPL currently has a PEG ratio of 5.02.
Another notable valuation metric for DUOL is its P/B ratio of 4.51. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, AMPL has a P/B of 4.69.
These metrics, and several others, help DUOL earn a Value grade of B, while AMPL has been given a Value grade of D.
DUOL has seen stronger estimate revision activity and sports more attractive valuation metrics than AMPL, so it seems like value investors will conclude that DUOL is the superior option right now.
Duolingo, Inc. (DUOL - Free Report) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.
Shares of this company have returned +5.2% over the past month versus the Zacks S&P 500 composite's -0.6% change. The Zacks Technology Services industry, to which Duolingo belongs, has lost 6.8% over this period. Now the key question is: Where could the stock be headed in the near term?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Earnings Estimate RevisionsHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Duolingo is expected to post earnings of $0.61 per share for the current quarter, representing a year-over-year change of -33%. Over the last 30 days, the Zacks Consensus Estimate has changed +3.7%.
For the current fiscal year, the consensus earnings estimate of $2.81 points to a change of -67.2% from the prior year. Over the last 30 days, this estimate has changed +1.7%.
For the next fiscal year, the consensus earnings estimate of $3.18 indicates a change of +13.2% from what Duolingo is expected to report a year ago. Over the past month, the estimate has changed +3.2%.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #2 (Buy) for Duolingo.
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
For Duolingo, the consensus sales estimate for the current quarter of $297.2 million indicates a year-over-year change of +17.8%. For the current and next fiscal years, $1.2 billion and $1.36 billion estimates indicate +16.1% and +12.6% changes, respectively.
Last Reported Results and Surprise HistoryDuolingo reported revenues of $291.97 million in the last reported quarter, representing a year-over-year change of +26.5%. EPS of $0.89 for the same period compares with $0.72 a year ago.
Compared to the Zacks Consensus Estimate of $288.54 million, the reported revenues represent a surprise of +1.19%. The EPS surprise was +12.66%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Duolingo is graded B on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Duolingo. However, its Zacks Rank #2 does suggest that it may outperform the broader market in the near term.
Looking for a stock that has been consistently beating earnings estimates and might be well positioned to keep the streak alive in its next quarterly report? Duolingo, Inc. (DUOL - Free Report) , which belongs to the Zacks Technology Services industry, could be a great candidate to consider.
This company has an established record of topping earnings estimates, especially when looking at the previous two reports. The company boasts an average surprise for the past two quarters of 15.82%.
For the most recent quarter, Duolingo was expected to post earnings of $0.79 per share, but it reported $0.89 per share instead, representing a surprise of 12.66%. For the previous quarter, the consensus estimate was $0.79 per share, while it actually produced $0.94 per share, a surprise of 18.99%.
Price and EPS Surprise
Thanks in part to this history, there has been a favorable change in earnings estimates for Duolingo lately. In fact, the Zacks Earnings ESP (Expected Surprise Prediction) for the stock is positive, which is a great indicator of an earnings beat, particularly when combined with its solid Zacks Rank.
Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Duolingo has an Earnings ESP of +9.55% at the moment, suggesting that analysts have grown bullish on its near-term earnings potential. When you combine this positive Earnings ESP with the stock's Zacks Rank #3 (Hold), it shows that another beat is possibly around the corner. The company's next earnings report is expected to be released on August 5, 2026.
Investors should note, however, that a negative Earnings ESP reading is not indicative of an earnings miss, but a negative value does reduce the predictive power of this metric.
Many companies end up beating the consensus EPS estimate, though this is not the only reason why their shares gain. Additionally, some stocks may remain stable even if they end up missing the consensus estimate.
Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
Duolingo, Inc. (DUOL - Free Report) closed at $128.35 in the latest trading session, marking a -3.01% move from the prior day. The stock's performance was behind the S&P 500's daily gain of 0.38%. Elsewhere, the Dow saw an upswing of 0.02%, while the tech-heavy Nasdaq appreciated by 0.9%.
Shares of the company have appreciated by 4.16% over the course of the past month, outperforming the Business Services sector's gain of 3.64%, and the S&P 500's gain of 1.27%.
The upcoming earnings release of Duolingo, Inc. will be of great interest to investors. The company's earnings report is expected on August 5, 2026. It is anticipated that the company will report an EPS of $0.58, marking a 36.26% fall compared to the same quarter of the previous year. Meanwhile, our latest consensus estimate is calling for revenue of $296.19 million, up 17.42% from the prior-year quarter.
DUOL's full-year Zacks Consensus Estimates are calling for earnings of $2.76 per share and revenue of $1.21 billion. These results would represent year-over-year changes of -67.79% and +16.36%, respectively.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Duolingo, Inc. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. At present, Duolingo, Inc. boasts a Zacks Rank of #4 (Sell).
In terms of valuation, Duolingo, Inc. is presently being traded at a Forward P/E ratio of 47.92. For comparison, its industry has an average Forward P/E of 16.85, which means Duolingo, Inc. is trading at a premium to the group.
One should further note that DUOL currently holds a PEG ratio of 1.03. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. As of the close of trade yesterday, the Technology Services industry held an average PEG ratio of 1.51.
The Technology Services industry is part of the Business Services sector. This industry currently has a Zacks Industry Rank of 105, which puts it in the top 43% of all 250+ industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
To follow DUOL in the coming trading sessions, be sure to utilize Zacks.com.
Duolingo has delivered strong top- and bottom-line growth, with shares up 39.1% since the March upgrade to 'Buy'. User engagement and monetization are accelerating, with DAUs up 21.2% and paid subscribers up 21.4% year over year. AI-driven feature expansion and content automation are driving platform stickiness and operational leverage, supporting long-term growth.
Duolingo (DUOL 3.94%) operates the world's largest digital language education platform. Its stock surged during 2024 and 2025 to hit a record high of about $540 in May of last year, but it has since plummeted by more than 75% amid concerns that artificial intelligence-powered translation tools could reduce demand for language lessons.
Plus, Duolingo's executive team recently made a business decision to prioritize user growth over the next couple of years, at the expense of monetization. As a result, Wall Street is pricing in less revenue and earnings growth, which has further contributed to the stock's decline.
However, I think the sell-off is overdone. Duolingo has already proven it can use AI to improve its platform, and focusing on user growth in the near term could lead to significantly higher revenue over the long term. The stock is now incredibly cheap, so here's why I predict it will double by the time 2027 rolls around.
Image source: Getty Images.
AI could be a tailwind, not a risk, for Duolingo Duolingo's mobile-first approach and highly interactive lessons are the secrets to its success. Around 56.5 million people used its app every single day during the first quarter, and while most of them were free users whom the company monetized through advertising, 12.5 million users were paying for subscriptions to unlock extra features.
A growing number of those features are powered by AI. Users who pay for a Super Duolingo or Duolingo Max plan can access Video Call, which features a digital avatar that helps them practice their foreign language speaking skills. During the first quarter, the number of spoken words per user who engaged with this tool more than doubled compared to the year-ago period, so it's clearly proving to be popular.
Because of the success of Video Call, Duolingo plans to introduce more speaking-based lessons for free users to increase the platform's popularity. This is one of the ways the company is sacrificing monetization in the short run: Making speaking-based tools more widely available will diminish the value of paid features like Video Call, but it could significantly increase the platform's overall user base in the long run.
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A growing user base will be a net positive over the long term Management's decision to sacrifice monetization in favor of faster user growth is already having a negative impact on Duolingo's financial performance. Revenue increased by 27% year over year during the first quarter, which was a solid result at face value, but a deceleration from its 38% growth in the same quarter of 2025.
That might sound like bad news, but management believes its strategic shift could lead to Duolingo's daily active user base nearly doubling to 100 million by 2028. Theoretically, a larger user base will make the platform harder to disrupt, so it will be more defensible against new competitors. Moreover, when the company decides to focus on monetization again in the future, it will have more overall users whom it can attempt to convert into paying subscribers.
If Duolingo converts free users into subscribers in 2028 at the same rate as it did in 2025, then we can assume its paying user base and annualized revenue will also eventually double from current levels. At that point, investors who sold Duolingo stock during its recent decline might wish they had held on.
Why Duolingo stock could double in the next six months Since Duolingo's management team is focused on a two-year plan, I don't expect the company's financial results to shoot the lights out in the near term. My prediction that the stock could double by 2027 is based mostly on its valuation -- in other words, I think the stock overshot to the downside, and is poised to recover some ground now that the dust has settled.
Duolingo stock is trading at a price-to-sales (P/S) ratio of just 5.7 as I write this, which is a significant discount to its average of 15.5 since going public in 2021. Even if the stock doubled from here, it would still have a below-average P/S ratio of 11.4.
DUOL PS Ratio data by YCharts.
Plus, based on Duolingo's trailing-12-month earnings of $8.74 per share, its stock is trading at a P/E ratio of 15.3, which is significantly cheaper than the broader market. The stock would have to more than double just to match the P/E of the Nasdaq-100 index, which is currently 35.2.
In summary, I think the sell-off in Duolingo stock is way overdone, and as long as the company doesn't dramatically miss Wall Street's expectations in its next couple of quarters, investors who buy it at around the current level could enjoy solid short-term and long-term rewards.
Duolingo, Inc. (DUOL - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Shares of this company have returned +4.9% over the past month versus the Zacks S&P 500 composite's +2.2% change. The Zacks Technology Services industry, to which Duolingo belongs, has gained 0.6% over this period. Now the key question is: Where could the stock be headed in the near term?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Revisions to Earnings EstimatesRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
For the current quarter, Duolingo is expected to post earnings of $0.58 per share, indicating a change of -36.3% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
The consensus earnings estimate of $2.76 for the current fiscal year indicates a year-over-year change of -67.8%. This estimate has remained unchanged over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $3.08 indicates a change of +11.5% from what Duolingo is expected to report a year ago. Over the past month, the estimate has remained unchanged.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Duolingo is rated Zacks Rank #3 (Hold).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth ForecastEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
For Duolingo, the consensus sales estimate for the current quarter of $296.19 million indicates a year-over-year change of +17.4%. For the current and next fiscal years, $1.21 billion and $1.36 billion estimates indicate +16.4% and +12.5% changes, respectively.
Last Reported Results and Surprise HistoryDuolingo reported revenues of $291.97 million in the last reported quarter, representing a year-over-year change of +26.5%. EPS of $0.89 for the same period compares with $0.72 a year ago.
Compared to the Zacks Consensus Estimate of $288.54 million, the reported revenues represent a surprise of +1.19%. The EPS surprise was +12.66%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Duolingo is graded C on this front, indicating that it is trading at par with its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Duolingo. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
Duolingo, Inc. has continued to report strong user growth. User base momentum should remain great. DUOL's DAU momentum defies AI concerns, and underlines that the brand remains strong despite a slowdown in social media engagement. Profitability is decreasing over the short-term as DUOL focuses on user growth instead of monetization. The headwind is only a short- to mid-term one.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of DUOL either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
PITTSBURGH, July 08, 2026 (GLOBE NEWSWIRE) -- Duolingo, Inc. (Nasdaq: DUOL), the world's leading mobile learning platform, will announce its results for the second quarter ending June 30, 2026, following the close of the U.S. market on Wednesday, August 5, 2026. The Company will host a video webcast at 5:00 p.m. ET on that day.
The live video webcast will be accessible to the public through Duolingo’s Investor Relations website at https://investors.duolingo.com. A replay of the event will be available two hours after the live event and archived on our Investor Relations website.
About Duolingo
Duolingo is the leading mobile learning platform globally. Its flagship app has organically become the world's most popular way to learn languages and the top-grossing app in the Education category on both Google Play and the Apple App Store. With technology at the core of everything it does, Duolingo has consistently invested to provide learners a fun, engaging, and effective learning experience while remaining committed to its mission to develop the best education in the world and make it universally available.
Duolingo, Inc. (DUOL - Free Report) closed the most recent trading day at $131.95, moving +1.72% from the previous trading session. This move outpaced the S&P 500's daily loss of 0.45%. On the other hand, the Dow registered a loss of 0.25%, and the technology-centric Nasdaq decreased by 1.16%.
The stock of company has risen by 9.97% in the past month, leading the Business Services sector's gain of 4.05% and the S&P 500's gain of 2.14%.
The investment community will be paying close attention to the earnings performance of Duolingo, Inc. in its upcoming release. The company is forecasted to report an EPS of $0.58, showcasing a 36.26% downward movement from the corresponding quarter of the prior year. Meanwhile, our latest consensus estimate is calling for revenue of $296.19 million, up 17.42% from the prior-year quarter.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $2.76 per share and revenue of $1.21 billion. These totals would mark changes of -67.79% and +16.36%, respectively, from last year.
Investors should also take note of any recent adjustments to analyst estimates for Duolingo, Inc. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. Duolingo, Inc. is holding a Zacks Rank of #3 (Hold) right now.
Looking at its valuation, Duolingo, Inc. is holding a Forward P/E ratio of 46.97. This represents a premium compared to its industry average Forward P/E of 17.75.
We can additionally observe that DUOL currently boasts a PEG ratio of 1.01. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Technology Services was holding an average PEG ratio of 1.53 at yesterday's closing price.
The Technology Services industry is part of the Business Services sector. With its current Zacks Industry Rank of 110, this industry ranks in the top 45% of all industries, numbering over 250.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
Duolingo, Inc. (DUOL - Free Report) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.
Over the past month, shares of this company have returned +9.1%, compared to the Zacks S&P 500 composite's -2.9% change. During this period, the Zacks Technology Services industry, which Duolingo falls in, has lost 5.6%. The key question now is: What could be the stock's future direction?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Earnings Estimate RevisionsRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Duolingo is expected to post earnings of $0.58 per share for the current quarter, representing a year-over-year change of -36.3%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
For the current fiscal year, the consensus earnings estimate of $2.76 points to a change of -67.8% from the prior year. Over the last 30 days, this estimate has remained unchanged.
For the next fiscal year, the consensus earnings estimate of $3.08 indicates a change of +11.5% from what Duolingo is expected to report a year ago. Over the past month, the estimate has remained unchanged.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Duolingo is rated Zacks Rank #4 (Sell).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
For Duolingo, the consensus sales estimate for the current quarter of $296.19 million indicates a year-over-year change of +17.4%. For the current and next fiscal years, $1.21 billion and $1.36 billion estimates indicate +16.4% and +12.5% changes, respectively.
Last Reported Results and Surprise HistoryDuolingo reported revenues of $291.97 million in the last reported quarter, representing a year-over-year change of +26.5%. EPS of $0.89 for the same period compares with $0.72 a year ago.
Compared to the Zacks Consensus Estimate of $288.54 million, the reported revenues represent a surprise of +1.19%. The EPS surprise was +12.66%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Duolingo is graded C on this front, indicating that it is trading at par with its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Duolingo. However, its Zacks Rank #4 does suggest that it may underperform the broader market in the near term.
It's been tough for long-term investors to hold Duolingo (DUOL +4.04%). The stock is down more than 70% over the past year, and while it was overvalued at over $400 per share, the current price is at bargain-basement levels, and some investors are finally noticing.
The stock has rallied more than 20% over the past month, and there are several reasons for Duolingo investors to feel optimistic that this is just the beginning.
Image source: Getty Images.
Duolingo isn't just for learning new languages Duolingo's original specialty was gamifying the language-learning experience. However, it is expanding into teaching other subjects, including chess, its fastest-growing subject.
Chess is a notable addition since it expands Duolingo's offerings beyond academic areas. The edtech company introduced math and music a few years ago and continues to expand its inventory. Duolingo is turning into an app that helps people master high-demand skills, not just new languages.
Its recent artificial intelligence (AI) investments also play a role here. Duolingo told investors in its Q1 shareholder letter that AI has "fundamentally changed how quickly we can create content." The company was able to publish 20,500 course units in Q1, compared to an average of 7,100 per quarter in 2025 and 1,800 per quarter in 2024.
Duolingo explained that this dramatic scaling helped it improve its popular Chinese, Japanese, and Korean courses. However, this same increase in content production makes it substantially easier for Duolingo to create new courses on high-demand skills that attract more users.
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Net income is still growing Almost tripling quarterly course unit production in a single year gives customers more options. That helps with revenue, but surprisingly, Duolingo's net income has marched higher as well. It truly demonstrates that Duolingo's AI efforts are cost-efficient, which makes the growth sustainable.
For instance, Duolingo delivered 24% year-over-year net income growth in Q1. Revenue was up by 27%, so there was a slight contraction in the net profit margin. Duolingo still walked away from the quarter with a double-digit profit margin, which has become the norm.
All of this financial growth is fueled by steady user acquisition. Duolingo's daily active users and paid subscribers were both up by 21% year over year. With 56.5 million and 12.5 million people, respectively, in those segments, Duolingo can still gain more market share. A side focus on hot, broader subjects like chess can expand Duolingo's footprint and keep users more engaged.
Intentional revenue slowdown is for long-term gains Although Duolingo's numbers were good, they were a downgrade from what investors have come to expect. Last year, Duolingo was exceeding 40% year-over-year revenue growth. A drop to 27% would explain the decline if Duolingo traded at over $400 per share then. However, Duolingo released Q1 results in early May, when almost all of the damage was already done.
Duolingo is aiming to become a company that will be around for 100 years and change how the world learns everything. This long-term vision comes with a medium-term goal of reaching 100 million daily active users in 2028.
The company could make more revenue by pushing its subscriptions or establishing a hard paywall, but Duolingo said its scale wouldn't be possible with a paywall model. Getting to 100 million daily active users with a freemium model will give Duolingo more options and financial growth in the future when it maximizes its average revenue per user.
In the meantime, Duolingo continues to improve its subscriptions so more people feel inclined to become paying customers. The company cited its subscription-only Video Call feature, which has more than doubled the average number of words spoken per user who takes advantage of it.
Duolingo anticipates 17.1% year-over-year revenue growth in Q2 and 16.1% in full-year 2026. The guidance figures imply deceleration and aren't glamorous for a growth stock, but Duolingo's correction is long overdue. Its efforts to attract 100 million daily active users in 2028 should pay off tremendously and give the company more opportunities to reignite revenue growth when the time calls for it.
Duolingo, Inc. (DUOL - Free Report) closed the most recent trading day at $119.94, moving -9.24% from the previous trading session. The stock's performance was behind the S&P 500's daily loss of 0.01%. On the other hand, the Dow registered a gain of 0.14%, and the technology-centric Nasdaq decreased by 0.46%.
Shares of the company have appreciated by 22.57% over the course of the past month, outperforming the Business Services sector's loss of 1.21%, and the S&P 500's loss of 1.4%.
The investment community will be closely monitoring the performance of Duolingo, Inc. in its forthcoming earnings report. On that day, Duolingo, Inc. is projected to report earnings of $0.58 per share, which would represent a year-over-year decline of 36.26%. Meanwhile, the latest consensus estimate predicts the revenue to be $296.19 million, indicating a 17.42% increase compared to the same quarter of the previous year.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $2.76 per share and a revenue of $1.21 billion, representing changes of -67.79% and +16.36%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for Duolingo, Inc. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. As of now, Duolingo, Inc. holds a Zacks Rank of #4 (Sell).
Looking at its valuation, Duolingo, Inc. is holding a Forward P/E ratio of 47.85. This represents a premium compared to its industry average Forward P/E of 15.61.
Also, we should mention that DUOL has a PEG ratio of 1.03. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Technology Services industry currently had an average PEG ratio of 1.4 as of yesterday's close.
The Technology Services industry is part of the Business Services sector. With its current Zacks Industry Rank of 162, this industry ranks in the bottom 34% of all industries, numbering over 250.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
To follow DUOL in the coming trading sessions, be sure to utilize Zacks.com.
In the latest trading session, Duolingo, Inc. (DUOL - Free Report) closed at $123.39, marking a -3.65% move from the previous day. This change lagged the S&P 500's 1.22% loss on the day. Meanwhile, the Dow experienced a drop of 0.98%, and the technology-dominated Nasdaq saw a decrease of 1.35%.
Coming into today, shares of the company had gained 12.24% in the past month. In that same time, the Business Services sector gained 0.83%, while the S&P 500 gained 1.56%.
The investment community will be paying close attention to the earnings performance of Duolingo, Inc. in its upcoming release. In that report, analysts expect Duolingo, Inc. to post earnings of $0.62 per share. This would mark a year-over-year decline of 31.87%. Meanwhile, the latest consensus estimate predicts the revenue to be $296.19 million, indicating a 17.42% increase compared to the same quarter of the previous year.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $2.84 per share and a revenue of $1.21 billion, indicating changes of -66.86% and +16.36%, respectively, from the former year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Duolingo, Inc. Such recent modifications usually signify the changing landscape of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Right now, Duolingo, Inc. possesses a Zacks Rank of #4 (Sell).
From a valuation perspective, Duolingo, Inc. is currently exchanging hands at a Forward P/E ratio of 45.17. This denotes a premium relative to the industry average Forward P/E of 15.84.
We can additionally observe that DUOL currently boasts a PEG ratio of 0.97. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Technology Services industry currently had an average PEG ratio of 1.43 as of yesterday's close.
The Technology Services industry is part of the Business Services sector. With its current Zacks Industry Rank of 165, this industry ranks in the bottom 33% of all industries, numbering over 250.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
Duolingo is rated Strong Buy, trading at 12x earnings and a 0.28x forward PEG, with robust free cash flow and no debt. DUOL's DAUs have grown 350% post-ChatGPT, reaching 56.5 million, with 22% conversion to paid users and a powerful, sticky brand. Despite sector-wide SaaS drawdown, DUOL's AI-driven growth, 35% free cash flow margins, and a $1.1 billion cash position underscore its asymmetrical risk/reward profile.
Duolingo, Inc. (DUOL - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Over the past month, shares of this company have returned +12.2%, compared to the Zacks S&P 500 composite's +2.1% change. During this period, the Zacks Technology Services industry, which Duolingo falls in, has gained 1.8%. The key question now is: What could be the stock's future direction?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Earnings Estimate RevisionsHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Duolingo is expected to post earnings of $0.62 per share for the current quarter, representing a year-over-year change of -31.9%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
For the current fiscal year, the consensus earnings estimate of $2.84 points to a change of -66.9% from the prior year. Over the last 30 days, this estimate has remained unchanged.
For the next fiscal year, the consensus earnings estimate of $3.13 indicates a change of +10.5% from what Duolingo is expected to report a year ago. Over the past month, the estimate has remained unchanged.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Duolingo is rated Zacks Rank #4 (Sell).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth ForecastWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
In the case of Duolingo, the consensus sales estimate of $296.19 million for the current quarter points to a year-over-year change of +17.4%. The $1.21 billion and $1.36 billion estimates for the current and next fiscal years indicate changes of +16.4% and +12.5%, respectively.
Last Reported Results and Surprise HistoryDuolingo reported revenues of $291.97 million in the last reported quarter, representing a year-over-year change of +26.5%. EPS of $0.89 for the same period compares with $0.72 a year ago.
Compared to the Zacks Consensus Estimate of $288.54 million, the reported revenues represent a surprise of +1.19%. The EPS surprise was +12.66%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Duolingo is graded C on this front, indicating that it is trading at par with its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Duolingo. However, its Zacks Rank #4 does suggest that it may underperform the broader market in the near term.
Duolingo (DUOL 3.72%) stock is trading as if its business is in deep trouble. The sell-off has pushed it to a multi-year low, hitting levels it hasn't reached since early 2023. It wasn't all that long ago, however, that the stock was looking much more promising, with its 52-week high being a shade under $545. These days, however, it's unclear whether it will even stay above $100, as it's now down around 80% from its high.
What's going on with the company, and is it in serious trouble, or is the tech stock trading so low that it's effectively become a no-brainer buy?
Image source: Getty Images.
The company's recent financials looked solid Duolingo recently reported its first-quarter results, which covered the first three months of 2026, and there weren't any glaring problems. Revenue rose by 27% to $292 million, and net income was up by 24%. Its profit margin remained healthy at around 15% of the top line. Impressively, its free cash flow also rose by 43% to $147.8 million.
The business is looking good, despite concerns of artificial intelligence (AI) potentially disrupting its growth potential. What may be a little worrisome is a slowdown in its growth rate; for the current quarter, the company anticipates that its revenue will grow at a rate of just 17%. It believes, however, that it's still on track to hit its full-year guidance of around 15-18% in top-line growth. Duolingo's growth may be slowing down, but those are still solid numbers overall.
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Is Duolingo's stock too cheap to pass up? Due to its steep sell-off, you can buy Duolingo stock at a considerable bargain right now. It trades at 12 times its trailing earnings and a multiple of 14 based on analyst projections of future profits. By comparison, the average S&P 500 stock trades at 26 times trailing earnings and a forward-earnings multiple of 22. Duolingo trades at a steep discount.
Its current valuation may be appropriate for a no-growth stock, but Duolingo's business is still expanding. While its growth rate may be slowing down, management said that would happen as it is focusing primarily on growing its user base over monetization. It's a strategy that could pay off over the long term.
While I wouldn't call Duolingo stock a no-brainer buy simply because there are some risks due to AI, I think there's a strong contrarian case to be made as to why it can generate strong returns for investors who buy right now. If you're willing to be patient and buy and hold, Duolingo stock may be worth adding to your portfolio today.
Duolingo CEO Luis von Ahn said there's some work AI cannot replace. Bloomberg/Getty Images Duolingo's CEO said AI still can't match the work of his company's artists and designers.
On Tuesday's episode of the "Rapid Response" podcast, CEO Luis von Ahn said that his team is trying to use AI as much as possible, but "we really don't want to decrease quality."
"For some things, AI is quite ready to do high-quality work. For some things, it's just not," he said. "We're not going to decrease quality just for the sake of using AI."
When podcast host Bob Safian asked where AI still falls short, von Ahn pointed to design.
"For example, we hire a lot of artists and designers, and our app is very high-craft when it comes to design," he said. "We're just not seeing AI get to the level of creativity or the level of polish that our top people have, by any means."
Duolingo has publicly embraced AI.
Last April, the company said it would evaluate employee performance partly based on AI usage. The company later walked that back, with von Ahn saying that this rule prompted employees to use AI in areas where it was unnecessary.
"I don't think that was right," he said on the Rapid Response episode about the evaluation criteria. He said that while most employees benefit from using AI, there were projects or roles where it might not help.
"So, making a blanket statement that we were going to evaluate employees on their usage of AI was not needed," he added. "We've removed that."
AI tools have spread across creative industries, with companies increasingly using them for everything from marketing assets to product design.
Some companies, like Kate Spade and Coach parent Tapestry, have said that AI is already part of their designers' workflows.
Read next
Aditi Bharade You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.
Buying stocks that are down and facing challenges can be difficult simply because you don't know if or when a turnaround may take place. It may require a great deal of patience to invest in a stock that many investors are betting against or that the market is expecting will struggle; that uncertainty inevitably gets priced into the stock's valuation.
But buying these types of contrarian stocks can also result in more significant gains later on, if the businesses are able to prove the market wrong. There are three stocks that I believe may be good ones to buy today, despite their current headwinds: Duolingo (DUOL 3.72%), Pfizer (PFE +0.69%), and Robinhood Markets (HOOD 0.81%).
Image source: Getty Images.
Duolingo Shares of Duolingo have taken a beating over the past 12 months, losing close to 80% of their value. Heightened fears about artificial intelligence (AI) stealing business and the company focusing on user growth over monetization are key reasons why the stock has plummeted as badly as it has.
But if you look at its financials, you'll see that the business is still doing well. Its growth rate has been slowing down. However, beyond that, the company isn't necessarily in dire shape. Over the trailing 12 months, it has generated $1.1 billion in sales, with net income totaling $422 million, for an impressive margin of 38%.
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AI may be both a threat and an opportunity for Duolingo, as it can help create lessons faster and offer a more customizable learning experience. At 12 times earnings, it's a fairly cheap stock to own right now, and it's one that I think the market has been overly punitive on; it could have a lot of room to rise higher.
Pfizer Pfizer's stock has been picking up steam over the past 12 months, rising by 16%. But it still has a long way to go in recovering from its freefall in recent years. Since 2022, its share price has crashed by about 56%. And based on analyst estimates, it's trading at just nine times its expected future earnings.
The healthcare stock remains heavily discounted due to the uncertainty around its future growth, with the company facing patent cliffs on multiple key drugs. That means its revenue could decline if it doesn't develop or acquire new products to make up for the shortfalls. The good news is that Pfizer has a massive pipeline of drugs. As of May 5, its pipeline stood at 96 potential drug candidates, as the company has been working feverishly (and acquiring companies) to create more opportunities to bolster its growth prospects.
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0.69
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0.18
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$
26.35
There's some risk with the stock, as is evident with its modest valuation, but if it's able to get one or two promising drugs approved, that could drastically change the outlook for the business. There's, of course, no guarantee that things will turn out in Pfizer's favor, but investing in the stock could be a calculated risk worth taking.
Robinhood Markets Shares of Robinhood are down nearly 30% this year, and a big part of that is due to a weak crypto market, with Bitcoin falling in value this year. Robinhood's trading app has seen fewer cryptocurrency transactions, and thus, that's impacted its growth rate. At 15% growth for the most recent quarter (which ended on March 31), it was a decent rate, but for a stock that's been trading at more than 40 times earnings, expectations will inevitably be high.
Robinhood has some terrific long-term growth opportunities in prediction markets, which can strengthen and diversify its already robust trading platform. Its popularity with young retail investors is another reason I believe the business may continue to grow and do well, as they can be among the most active traders, whether it's in crypto, stocks, or prediction markets.
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-0.81
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-0.75
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$
91.48
Although the stock may still be a bit expensive, given the growth opportunities it may offer, I think a strong case can be made for buying Robinhood stock right now. It's down nearly 50% from its 52-week high of $153.86. Even if it doesn't get back to that level, the stock may still have room to generate excellent returns for investors from here on out.
*Stock prices used were the afternoon prices of May 11, 2026. The video was published on May 13, 2026.
Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Duolingo. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
Duolingo faces bearish sentiment after growth slowdown, management's AI focus, and concerns over user metrics transparency. Q1 FY26 showed DAU growth dropping to 21% and MAU to 6%, with management shifting focus from monetization to user acquisition. AI integration has accelerated content creation and engagement, raising DAU/MAU to 41%, but monetization remains uncertain, especially outside the US.
Ann Berry is joined by Gillian Munson, CFO of Duolingo to discuss the company's transformation as it pursues user growth over short-term revenue. They dive into Duolingo's expansion beyond language learning, growth opportunities across Asia, and how AI is accelerating content production.
I have followed Duolingo (DUOL 3.72%) stock since it went public in 2021, but I didn't actually buy it until March of this year. It was down by more than 79% from its June 2025 record high when I decided to dive in at a time when most investors were fretting over two potential headwinds for its business.
Duolingo operates the world's largest digital language education platform. Management recently announced a plan to focus on user growth for the next couple of years, which has already caused a slowdown in the company's revenue and earnings growth. At the same time, there have been concerns that artificial intelligence (AI) could disrupt the platform's success.
Personally, I think Duolingo's renewed focus on user acquisition will yield significant long-term rewards for shareholders, and I also believe AI will be a tailwind, not a threat, to its business. The stock has already jumped 25% from my initial purchase price of around $90, and while it's way too early to declare victory, here's why I think significantly more upside could be ahead.
Image source: The Motley Fool.
AI is enhancing the learning experience Duolingo's success stems from its mobile-first approach, which puts language education at the fingertips of practically anyone with a smartphone. Plus, its gamified and highly interactive lessons keep learners engaged, which is the key to monetizing them over the long term.
Duolingo had 56.5 million daily active users at the conclusion of the first quarter of 2026 (ended March 31), which was up 21% compared to the year-ago period. The majority of them were free users who Duolingo monetizes through advertising, but 12.5 million of them were paying a subscription fee to unlock additional features to accelerate their learning.
While some investors believe new AI-powered translation tools will make Duolingo's platform obsolete, the company is proving it can use this new technology to its advantage.
In 2024, it launched a new feature called Video Call, which is only available to users who pay for a Super Duolingo or Duolingo Max subscription. It uses an AI-powered digital avatar to help users practice their foreign language speaking skills, and during the first quarter, the average number of spoken words per user who engaged with the feature more than doubled compared to the year-ago period. In other words, Video Call is already a massive tailwind for engagement.
But Duolingo is also using AI behind the scenes. The company published 20,500 course units during the first quarter, up significantly from an average of 7,100 per quarter in 2025, thanks to AI-powered automation. This means lessons are added and updated more frequently to keep users coming back, and it also reduces costs because fewer human workers are required to draft content.
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Faster user growth could be great for shareholders Duolingo generated $292 million in revenue during the first quarter, which was up 27% year over year. While that was a solid growth rate, it marked a deceleration from the 38% growth the company delivered in the same quarter of 2025.
That is one of the drawbacks of management's decision to prioritize user acquisition over monetization. As part of this new strategy, Duolingo is offering more speaking-based lessons to free users in order to appeal to a wider audience. However, this diminishes the value of subscription-only features like Video Call, hence the slower revenue growth.
Revenue and earnings tend to drive stock prices, which explains why Duolingo shed so much value over the past year. However, management believes the platform's daily active user base will almost double to 100 million over the next two years as a result of this strategy shift.
In theory, a larger user base will make Duolingo harder to disrupt, thus making its business more defensible against competitive threats. Plus, the company will have more prospects to monetize in the future, leading to more revenue and profit.
If Duolingo turns its attention back to monetization in 2028 and converts free users into subscribers at the same rate as it did in 2025, then we can assume its paying user base and annualized revenue would roughly double from current levels. In other words, once the company has fortified its user base, I think its revenue growth could reaccelerate.
Duolingo's valuation leaves room for more upside Duolingo stock is trading at a price-to-sales (P/S) ratio of just 5 as I write this, which is a steep discount to its average of 15.8 since going public in 2021. It's also trading at a forward P/S ratio of 3.8, based on Wall Street's $1.37 billion revenue estimate for 2027 (supplied by Yahoo! Finance). In other words, the stock looks like a bargain relative to its historical valuation.
Data by YCharts.
The stock also looks cheap by another widely used valuation method. Based on the company's trailing-12-month generally accepted accounting principles (GAAP) earnings of $8.74 per share, its stock is trading at a price-to-earnings (P/E) ratio of just 13.1, which is half the P/E ratio of the S&P 500 index. So, Duolingo is much cheaper than the broader market right now.
Moreover, Wall Street doesn't expect management's strategy shift to have a major impact on the company's bottom line, because the stock trades at a forward P/E ratio of 14.1 based on 2027 earnings estimates.
Data by YCharts.
In summary, Duolingo stock still looks cheap despite its 25% bounce since my purchase in March. That gives me confidence that more upside might be ahead -- but I plan to hold until at least 2028, because I think that's when investors will yield the biggest rewards.
Duolingo, Inc. (DUOL - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.
Over the past month, shares of this company have returned +5.3%, compared to the Zacks S&P 500 composite's +5.5% change. During this period, the Zacks Technology Services industry, which Duolingo falls in, has gained 0.6%. The key question now is: What could be the stock's future direction?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Revisions to Earnings EstimatesHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
Duolingo is expected to post earnings of $0.62 per share for the current quarter, representing a year-over-year change of -31.9%. Over the last 30 days, the Zacks Consensus Estimate has changed -1.9%.
For the current fiscal year, the consensus earnings estimate of $2.84 points to a change of -66.9% from the prior year. Over the last 30 days, this estimate has changed -11.1%.
For the next fiscal year, the consensus earnings estimate of $3.13 indicates a change of +10.5% from what Duolingo is expected to report a year ago. Over the past month, the estimate has changed -13.9%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Duolingo is rated Zacks Rank #3 (Hold).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
In the case of Duolingo, the consensus sales estimate of $295.63 million for the current quarter points to a year-over-year change of +17.2%. The $1.21 billion and $1.36 billion estimates for the current and next fiscal years indicate changes of +16.3% and +13%, respectively.
Last Reported Results and Surprise HistoryDuolingo reported revenues of $291.97 million in the last reported quarter, representing a year-over-year change of +26.5%. EPS of $0.89 for the same period compares with $0.72 a year ago.
Compared to the Zacks Consensus Estimate of $288.54 million, the reported revenues represent a surprise of +1.19%. The EPS surprise was +12.66%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Duolingo is graded B on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Duolingo. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
While there's ample discussion among investors about artificial intelligence (AI) stocks, much of it centers around chipmakers, cloud companies, and large language model (LLM) developers. There's a different type of company that rarely appears in those conversations: Duolingo (DUOL 3.72%), maker of the most popular language-learning app.
Duolingo's AI push initially drew significant criticism. In June 2025, CEO Luis von Ahn made a controversial announcement that Duolingo would be an AI-first company. He later clarified that he doesn't see AI replacing what Duolingo employees do. Despite the initial backlash, the focus on leveraging AI has made a positive impact on Duolingo's business.
Image source: The Motley Fool.
Scaling up course production via AI One area where AI has made a difference for Duolingo is course content. Using generative AI, the company has drastically scaled up production. In April 2025, von Ahn announced that the company had developed 148 new language courses in a year. Its first 100 courses took 12 years to develop.
This production growth is accelerating, according to metrics from its first-quarter shareholder letter. In Q1, Duolingo published 20,500 course units, up from an average of 7,100 per quarter in 2025 and 1,800 per quarter in 2024.
Every additional course and language combination expands Duolingo's market, and the increase in courses has corresponded to an increase in users. Daily active users hit 56.5 million in the first quarter, up 21% year over year. Paid subscribers at the end of the quarter also increased by 21% to 12.5 million, indicating that the app is continuing to convert users into paying customers at the same rate.
Duolingo's financials are following suit While Duolingo management is prioritizing user growth, earnings are also moving in the right direction. Revenue in Q1 increased 27% year over year to $292 million, and net income increased 24% to $43.5 million.
Duolingo has an efficient business with high margins (gross margin was 73% in the first quarter), and that means it has excellent cash flow. Free cash flow (FCF) for the quarter was $147.8 million, putting the company in a strong financial position.
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Duolingo stock trades at a reasonable 13 times trailing earnings. It's worth noting that the share price has plummeted nearly 80% since May 2025, when it peaked at $541, which is why it's so affordable now. Several factors contributed to the decline, including the AI backlash, a focus on user growth over monetization, and worries about AI's impact on software stocks.
The AI backlash seems overblown at this point, given how many other tech companies have announced layoffs amid AI pivots. Even with the focus on user growth, Duolingo is still growing financially. The biggest concern is AI acting as a headwind to software companies like Duolingo. Still, I think it's more likely that Duolingo and many other software businesses will use AI to their advantage.
Duolingo is different from most AI stocks, and that's what makes it interesting as an investment. The company isn't selling chips or spending hundreds of billions of dollars on data centers. It's using AI to improve what it already does. At Duolingo's current valuation, AI-focused investors may want to consider picking up some shares.
Duolingo just released one of its most requested features ever—but it’ll only be available for a single month.
The feature gives anyone who had previously built a streak of more than 30 days, but then lost that streak by missing too many lessons, the chance to earn it back. That means anyone who skipped their French instruction for their wedding, for an international vacation, or while in labor will finally be able to stop lamenting their lost language-learning glory to their friends. The event will run from June 1 to June 30.
While Duolingo does give users “streak freezes,” which allow habitual streak-havers to pause their lessons for a short period of time, this is the first time that the company has allowed users to revive a permanently lost streak. According to a press release, in the past year alone, tens of thousands of learners asked Duolingo for their streak back across social media in more than 80 countries.
The streak-revival campaign comes as Duolingo is actively prioritizing user growth in 2026. While announcing the company’s Q4 2025 results, CEO Luis von Ahn told investors that Duolingo’s goal is to achieve 100 million daily active users in the medium-term, essentially doubling its existing monthly active users. To achieve that, the company is focusing on giving subscribers of some of its lower-cost subscription plans access to AI tools that would otherwise be limited to higher-cost, premium paid plans.
So far, investors seem to be less than thrilled with the company’s direction in 2026: Share prices are currently down 77% year over year (a decline that was kick-started by the company’s infamous “AI-first” memo in April 2025).
Nevertheless, Duolingo is moving forward with its goal of expanding its user base—and giving learners the rare opportunity to restore their streak is one lever it’s pulling to drive that growth.
Here’s how to restore your own dead Duolingo streak:
The final deadline for Fast Company's Next Big Things in Tech Awards is Friday, June 12, at 11:59 p.m. PT. Apply today.
Duolingo, Inc. (DUOL - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Shares of this company have returned +5.7% over the past month versus the Zacks S&P 500 composite's +5.4% change. The Zacks Technology Services industry, to which Duolingo belongs, has gained 11.3% over this period. Now the key question is: Where could the stock be headed in the near term?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Earnings Estimate RevisionsHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
For the current quarter, Duolingo is expected to post earnings of $0.62 per share, indicating a change of -31.9% from the year-ago quarter. The Zacks Consensus Estimate has changed -4.3% over the last 30 days.
For the current fiscal year, the consensus earnings estimate of $2.84 points to a change of -66.9% from the prior year. Over the last 30 days, this estimate has changed -8.2%.
For the next fiscal year, the consensus earnings estimate of $3.13 indicates a change of +10.5% from what Duolingo is expected to report a year ago. Over the past month, the estimate has changed -6.5%.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #4 (Sell) for Duolingo.
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth ForecastWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
In the case of Duolingo, the consensus sales estimate of $295.63 million for the current quarter points to a year-over-year change of +17.2%. The $1.21 billion and $1.36 billion estimates for the current and next fiscal years indicate changes of +16.3% and +13%, respectively.
Last Reported Results and Surprise HistoryDuolingo reported revenues of $291.97 million in the last reported quarter, representing a year-over-year change of +26.5%. EPS of $0.89 for the same period compares with $0.72 a year ago.
Compared to the Zacks Consensus Estimate of $288.54 million, the reported revenues represent a surprise of +1.19%. The EPS surprise was +12.66%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Duolingo is graded B on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Duolingo. However, its Zacks Rank #4 does suggest that it may underperform the broader market in the near term.
It has been about a month since the last earnings report for Duolingo, Inc. (DUOL - Free Report) . Shares have added about 5.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Duolingo due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent drivers for Duolingo, Inc. before we dive into how investors and analysts have reacted as of late.
Duolingo’s Q1 Earnings Beat EstimatesDuolingo, Inc. delivered first-quarter 2026 earnings of 89 cents per share, beating the Zacks Consensus Estimate of 79 cents by 12.7%. Revenues rose 27.0% year over year to $292.0 million and topped the consensus call of $288.5 million by 1.2%.
The quarter showed continued engagement strength, with daily active users increasing 21% year over year to 56.5 million, as management leaned further into product improvements designed to deepen learning outcomes.
DUOL’s Subscriber Growth Supports the Core ModelA growing paid base remained an important support for results. Paid subscribers reached 12.5 million at period end, up 21% from the year-ago quarter, pointing to steady conversion alongside a larger active community. Monthly active users also increased to 137.8 million, reinforcing the scale of the platform.
Management reiterated that it is still early in its 2026 strategic shift, but the company continues to prioritize teaching better while growing its audience. The medium-term goal remains reaching 100 million daily active users in 2028, with product quality positioned as a key lever for retention and word-of-mouth expansion.
Duolingo Deepens Speaking as a Daily HabitDuolingo put particular emphasis on making speaking a more central part of the learning experience. The company introduced “spoken tokens,” enabling learners to speak answers instead of tapping words, and launched flashcards that push faster recall by having users say words and phrases aloud.
The company also began rolling out “Speaking Adventures,” built around real-world tasks that require learners to speak with Duolingo characters. For paid users, Video Call continued to improve, and management said the feature has helped more than double the average number of words spoken per user over the past year.
DUOL Uses AI to Accelerate Content CreationContent scaling was another highlight of the quarter. DUOL said it published 20,500 course units in the first quarter alone, reflecting the impact of AI tools that are speeding production and enabling broader updates across many language courses at once.
The company also pointed to expanding depth in its most important offerings. It has launched content up to Duolingo Score 129 (CEFR B2) across courses teaching its nine most-learned languages, positioning the platform as a path to more advanced proficiency. Alongside that expansion, Duolingo said it is improving Chinese, Japanese and Korean courses by simplifying early lessons and easing the learning curve for character systems.
Duolingo’s Bookings Show Monetization ResilienceBookings growth suggested that monetization held up as the company continues to refine its approach. Total bookings increased 14% year over year to $308.5 million, driven by continued subscriber growth and favorable advertising trends. Subscription bookings rose 15% to $268.1 million.
Revenue composition continued to skew heavily toward subscriptions. Subscription revenue grew 31% year over year to $250.9 million. Advertising revenue increased 15% to $20.6 million, while Duolingo English Test revenues declined 6% to $11.3 million, and in-app purchases decreased 11% to $8.4 million.
DUOL Expands Gross Margin as Costs ImproveProfitability improved as gross margin expanded 190 basis points year over year to 73.0%, which management attributed primarily to continued reductions in per-unit AI costs. Gross profit increased to $213.1 million, up from $164.1 million a year ago.
Operating expenses rose as the company continued investing in long-term growth. Research and development expense increased to $83.0 million, sales and marketing climbed to $39.2 million, and general and administrative expense rose to $46.3 million. Even with higher spending, adjusted EBITDA grew to $83.4 million, representing a 28.6% margin.
Duolingo Updates 2026 Targets and Capital ReturnsDuolingo’s cash generation remained strong in the quarter. Net cash provided by operating activities was $150.8 million, and free cash flow totaled $147.8 million, equating to a 50.6% free-cash-flow margin. The company ended the quarter with $1.1 billion in cash and cash equivalents, supporting flexibility for both investment and shareholder returns.
Guidance reinforced management’s view of 2026 as a strategic investment year. For the second quarter of 2026, the company guided revenues of $295.5 million and bookings of $283.5 million, with adjusted EBITDA of $71.0 million (24.0% margin). For full-year 2026, Duolingo expects revenues of $1.205 billion and bookings of $1.28 billion, with adjusted EBITDA of $310 million (25.7% margin). Management also expects gross margin to trend down through the year as AI feature use expands, with a target of roughly 69% by the fourth quarter.
How Have Estimates Been Moving Since Then?Since the earnings release, investors have witnessed a downward trend in estimates review.
VGM ScoresCurrently, Duolingo has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a grade of B on the value side, putting it in the top 40% for value investors.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Duolingo has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry PlayerDuolingo is part of the Zacks Technology Services industry. Over the past month, SLB (SLB - Free Report) , a stock from the same industry, has gained 1%. The company reported its results for the quarter ended March 2026 more than a month ago.
SLB reported revenues of $8.72 billion in the last reported quarter, representing a year-over-year change of +2.7%. EPS of $0.52 for the same period compares with $0.72 a year ago.
SLB is expected to post earnings of $0.53 per share for the current quarter, representing a year-over-year change of -28.4%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.8%.
SLB has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
Duolingo (DUOL 3.72%) is proof that a business can have solid fundamentals but a waning stock price. The green bird hasn't fared well with its 38% year-to-date decline, but the edtech company presents a compelling opportunity.
All of the right numbers continue to trend upward, and that should eventually reflect on the stock price, which trades at a 15.7 forward price-to-earnings (P/E) ratio.
Image source: Getty Images.
Duolingo continues to attract new users and boost its revenue High revenue growth is one of the hallmarks of a successful growth stock, and Duolingo checks that box. Revenue increased by 27% year over year as the app reached 56.5 million daily active users, which is up by 21% year over year. The edtech company also reached 12.5 million paid subscribers, a 21% year-over-year improvement.
High user growth and revenue gains, combined with a rising net income, are signs of a healthy company. It comes as Duolingo makes changes to its app in an effort to drive "long-term engagement and loyalty."
Duolingo recently changed its app to incorporate more speaking practice, instead of users just clicking on the correct answer. The company said in its first-quarter presentation that this change is "critical for developing conversational skills" in a target language. Better results can boost retention and prompt Duolingo customers to learn additional languages on the app.
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The AI software apocalypse is substantially overdone Duolingo was one of many victims of the "AI SaaS Apocalypse," which took place earlier this year. Anthropic's Claude Cowork plug-ins could perform advanced workflows autonomously, and some people thought it would be the end of many software companies. As a result, Duolingo stock took a massive hit. Although the narrative has recently revolved around the possibility of artificial intelligence making Duolingo irrelevant, the fundamentals present a different picture.
This mismatch will become clearer in the months ahead, and Duolingo's Q1 shareholder letter further pointed out this disconnect. The edtech company told investors it was using AI tools to "fundamentally change how quickly [they] can create content." This omission indicates that AI is a catalyst for Duolingo instead of a threat. It's even translating into better fundamentals.
"We can now push changes across many courses at once and improve quality more quickly and consistently. This is already improving engagement among new users," Duolingo said in its shareholder letter.
While investors can argue that Duolingo was overvalued when it traded near $600 per share, it's harder to make that same case now that Duolingo barely trades above $100 per share. One year ago, Duolingo had a forward P/E ratio well above 100, but its current 15.7 forward P/E ratio suggests that it is due for a comeback.
Duolingo stock is showing exceptional strength. Why is DUOL stock up today? What Is Driving Duolingo’s Stock Momentum?Today's push looks like a momentum-driven continuation of the stock's recent recovery phase, with price pressing into a nearby pivot area around $119 after reclaiming key short-term trend levels. With the broader tape green and tech in the lead, DUOL is getting an extra tailwind as traders rotate back toward higher-beta software-style setups.
Market breadth is still mixed (4 sectors advancing, 7 declining, with a 0.6 advance/decline ratio), which can keep rallies choppy even when the major indexes are higher.
DUOL’s Key Moving Averages And Price LevelsDUOL is now trading 9.1% above its 20-day SMA ($108.98) and 14.3% above its 50-day SMA ($104.02), which tells you the near-term trend has flipped back to "buyers in control" after the April low. At the same time, it remains 34.3% below its 200-day SMA ($181.00), so the longer-term chart is still in repair mode rather than a fully restored uptrend.
RSI is the cleaner momentum read right now, sitting at 51.27—neutral, but no longer "washed out" like it was when RSI dipped into oversold territory in March. In plain English, RSI helps gauge whether a move is getting stretched; a neutral reading suggests the stock has room to trend without immediately flashing an overbought warning.
The moving-average structure is sending mixed signals: the 20-day SMA is above the 50-day SMA (bullish), but the stock is still living under the longer-term "death cross" that formed in August 2025 (50-day below 200-day). That combination often produces sharp rallies that can still fail at overhead resistance until the 200-day trend starts flattening and turning up.
Key Resistance: $119.00 — a nearby pivot/round-number area where rebounds can stall, especially with price pressing into it after today's surge Key Support: $98.50 — a prior buyer-defense zone that sits above the 52-week low area ($87.89), making it a key "line in the sand" if momentum fades Duolingo’s Benzinga Edge Scorecard BreakdownBelow is the Benzinga Edge scorecard for Duolingo, highlighting its strengths and weaknesses compared to the broader market:
The Verdict: Duolingo’s Benzinga Edge signal reveals a growth-heavy profile with neutral value characteristics but a still-weak momentum score. For longer-term bulls, the setup improves if price can build above nearby resistance and start working back toward the 200-day trend, while risk management tends to center on whether support zones hold during pullbacks.
Current Price Action For DUOL StockDUOL Stock Price Activity: Duolingo shares were up 9.32% at $119.19 at the time of publication on Monday, according to Benzinga Pro data.
Image: Shutterstock
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Market News and Data brought to you by Benzinga APIs
Shares of Duolingo (DUOL 3.72%) have jumped 10% in trading on Monday as the company benefits from investors looking for value in growing software stocks. But the company may have long-term tailwinds that will last more than today and this is a great opportunity.
In this video, I highlight the improving metrics behind the business and why Duolingo's stock could be a great long-term buy.
*Stock prices used were end-of-day prices of June 8, 2026. The video was published on June 8 2026.
Travis Hoium has positions in Duolingo. The Motley Fool has positions in and recommends Duolingo. The Motley Fool has a disclosure policy. Travis Hoium is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.
Shares of Duolingo DUOL moved higher on Monday as investors returned to growth-oriented technology stocks.
Improving sentiment across the broader market also helped lift software names that have suffered steep declines over the past year.
The language-learning platform gained more than 8.8% during the session, outperforming a Nasdaq rally of about 2.2%.
The move extended a recent recovery for the stock, even though shares remain well below their highs from the past year.
The latest rebound comes as investors weigh Duolingo's strong operating performance against concerns that advances in artificial intelligence could disrupt software companies across the education technology sector.
User growth and revenue remain strongDespite a challenging period for the stock price, Duolingo's underlying business metrics have continued to improve.
The company reported first-quarter revenue growth of 27% from a year earlier, while daily active users climbed 21% to 56.5 million.
Paid subscribers also increased 21% year over year to 12.5 million.
The combination of rising revenue, expanding user engagement, and improving profitability has reinforced the view among some investors that the company's fundamentals remain intact despite recent market volatility.
Duolingo has also been updating its platform to encourage deeper user engagement.
The company recently introduced additional speaking exercises, shifting away from a model that relied primarily on selecting correct answers.
In its first-quarter shareholder presentation, Duolingo said the change is "critical for developing conversational skills" in a target language.
The company believes stronger learning outcomes could improve user retention and encourage subscribers to study additional languages through the platform.
Duolingo was among the companies caught up in what some investors referred to as the "AI SaaS Apocalypse" earlier this year, when concerns grew that increasingly capable artificial intelligence systems could automate many software functions.
The launch of advanced AI workflow tools, including Anthropic's Claude Cowork plug-ins, fueled speculation that some software businesses could face significant disruption.
However, Duolingo has argued that AI is becoming an advantage rather than a competitive threat.
In its shareholder letter, the company said it was using artificial intelligence tools to "fundamentally change how quickly [they] can create content."
"We can now push changes across many courses at once and improve quality more quickly and consistently. This is already improving engagement among new users," Duolingo said in its shareholder letter.
Some investors also point to the company's sharply lower valuation.
While Duolingo once traded at a forward price-to-earnings multiple above 100, the stock now trades at roughly 15.7 times forward earnings.
Monday's rally also reflected improving momentum across technology stocks.
According to market data, DUOL was trading about 9.1% above its 20-day simple moving average and 14.3% above its 50-day moving average, suggesting that near-term sentiment has turned more constructive following the April lows.
At the same time, the stock remains approximately 34.3% below its 200-day moving average, indicating that the longer-term recovery is still developing.
The stock's relative strength index stood at 51.27, a neutral reading that suggests momentum has improved without reaching overbought conditions.
Analysts noted that the current technical setup remains mixed, with short-term indicators turning positive while longer-term resistance levels continue to cap the recovery.
Key resistance is centered around the $119 level, while support remains near $98.50, an area that has previously attracted buyers if momentum weakens.
Duolingo is now rated Buy after a 76% sell-off, which appears overdone relative to its fundamentals. Despite a 55% stock decline in 7 months, DUOL continues to deliver double-digit top and bottom-line growth. DUOL's robust earnings and only one bottom-line miss since 2024 suggest no structural business issues.
Duolingo remains a compelling buy as product strategy resets and expectations are already low. Despite a 30% YTD decline, DUOL sustains double-digit growth in MAUs, DAUs, and paid users at scale. Product stickiness and rising DAU/MAU ratios reinforce DUOL's strong monetization foundation.
Duolingo, Inc. (DUOL - Free Report) ended the recent trading session at $123.97, demonstrating a +1.68% change from the preceding day's closing price. The stock's change was less than the S&P 500's daily gain of 1.75%. At the same time, the Dow added 1.86%, and the tech-heavy Nasdaq gained 2.54%.
The stock of company has risen by 16.14% in the past month, leading the Business Services sector's loss of 1.26% and the S&P 500's loss of 1.63%.
Analysts and investors alike will be keeping a close eye on the performance of Duolingo, Inc. in its upcoming earnings disclosure. The company's upcoming EPS is projected at $0.62, signifying a 31.87% drop compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $296.19 million, indicating a 17.42% increase compared to the same quarter of the previous year.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $2.84 per share and a revenue of $1.21 billion, signifying shifts of -66.86% and +16.36%, respectively, from the last year.
Investors might also notice recent changes to analyst estimates for Duolingo, Inc. Recent revisions tend to reflect the latest near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Duolingo, Inc. is currently sporting a Zacks Rank of #4 (Sell).
In terms of valuation, Duolingo, Inc. is presently being traded at a Forward P/E ratio of 43.01. Its industry sports an average Forward P/E of 16.08, so one might conclude that Duolingo, Inc. is trading at a premium comparatively.
Meanwhile, DUOL's PEG ratio is currently 0.92. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. DUOL's industry had an average PEG ratio of 1.32 as of yesterday's close.
The Technology Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 156, putting it in the bottom 37% of all 250+ industries.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.
