Duolingo Shares Plunge 23.6% Amid Slower Growth and CFO Departure
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5d ago
0mins
Should l Buy DUOL?
Source: Fool
- Stock Price Plunge: Duolingo's shares fell 23.6% in January 2026, reaching their lowest level since March 2023, primarily due to slower user growth amid a shaky global economy, reflecting market concerns about its future prospects.
- Executive Departure Impact: CFO Matt Skaruppa announced his departure after six years, with the market reacting mildly; however, this change may heighten investor uncertainty regarding the company's strategic direction, especially as it undergoes a management shift.
- Slowing User Growth: Despite Duolingo's management strategy adjustment in November 2025 aimed at optimizing user growth and teaching quality, daily active users (DAUs) fell short of expectations, indicating consumer hesitance to invest in personal improvement during the current economic climate.
- Strong Profitability: Despite challenges, Duolingo achieved a 40% net profit margin over the last four quarters and generated $355 million in free cash flow from $964 million in sales, showcasing its potential as a cash-generating machine that could support future growth.
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Analyst Views on DUOL
Wall Street analysts forecast DUOL stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for DUOL is 260.36 USD with a low forecast of 160.00 USD and a high forecast of 330.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
17 Analyst Rating
10 Buy
6 Hold
1 Sell
Moderate Buy
Current: 119.400
Low
160.00
Averages
260.36
High
330.00
Current: 119.400
Low
160.00
Averages
260.36
High
330.00
About DUOL
Duolingo, Inc. is a technology company. The Company is engaged in offering a mobile learning platform, as well as a digital English language proficiency assessment exam. It operates a freemium business model, namely, the app and the Website are accessible free of charge, although Duolingo also offers premium services for a subscription fee. Its solutions consist of the Duolingo App, Super Duolingo, Duolingo Max, Duolingo English Test: AI-Driven Language Assessment, Duolingo for Schools, and Duolingo ABC. The Duolingo App offers courses in over 40 different languages, including Spanish, English, French, German, Italian, Portuguese, Japanese and Chinese. Duolingo can also be accessed on desktop computers via a Web browser. Its subscription offering, Super Duolingo, offers learners additional features to enhance their learning experience. The Duolingo English Test is an online, on-demand, high-stakes English proficiency assessment. It also operates an animation and motion design studio.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Duolingo Stock Plummets Despite Rising Revenue and Engagement
- Stock Price Crash: Duolingo's stock price faced a significant decline as of February 3, 2026, yet the company's revenue and user engagement continue to rise, indicating a potential misjudgment of its future prospects by the market.
- Revenue Growth: Despite the stock price drop, Duolingo's revenue is still on the rise, suggesting that its core business maintains strong market demand, potentially offering a buying opportunity for investors.
- Free Cash Flow Improvement: The company's free cash flow is consistently increasing, reflecting enhanced operational efficiency and successful cost control, which lays a solid foundation for future investments and expansion.
- User Engagement Increase: The rise in user engagement not only strengthens Duolingo's competitive position in the market but may also support its long-term growth, even though the stock has underperformed in the short term.
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Duolingo's Stock Plummets Despite Rising Revenue and Engagement
- Stock Price Drop: Duolingo's stock price was crushed on February 3, 2026, yet its revenue and user engagement continue to rise, indicating a potential undervaluation of its future prospects in the market.
- Cash Flow Growth: The company's free cash flow is on the rise, suggesting improvements in operational efficiency and profitability, which could yield potential returns for long-term investors despite the stock decline.
- Market Expectation Adjustment: The analyst team noted that Duolingo did not make the current list of top stocks, reflecting a cautious market sentiment regarding its future performance, which may impact investor confidence.
- Investment Opportunity Assessment: Despite facing challenges, the video analysis suggests that the current sell-off may present a rare buying opportunity for investors, especially as long-term growth potential becomes increasingly evident.
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- Key Contract Signing: Hut 8 signed a $7 billion deal with Anthropic to supply 245 megawatts of power, with the total contract value potentially reaching $17.7 billion if all options are exercised, positioning the company for long-term benefits through this strategic partnership.
- Duolingo's Market Opportunity: Duolingo's mobile education app is tapping into the $5 trillion global education market, with AI-driven educational technology expected to drive long-term market growth, and despite a stock price decline, its market potential remains substantial.
- Strong User Growth: Duolingo reported a 36% year-over-year increase in daily active users in Q3, and the application of AI technology will further enhance user experience and profitability, with a market cap of $6 billion indicating significant upside potential in the education market.
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Duolingo Stock Plummets Despite Rising Revenue and Engagement
- Stock Price Crash: Duolingo's stock price faced a significant decline as of February 3, 2026, yet the company's revenue and user engagement continue to rise, indicating a potential misjudgment of its future prospects by the market.
- Revenue Growth: Despite the stock price drop, Duolingo's revenue is still on the rise, suggesting that its core business maintains strong market demand, potentially offering a buying opportunity for investors.
- Free Cash Flow Improvement: The company's free cash flow is consistently increasing, reflecting enhanced operational efficiency and successful cost control, which lays a solid foundation for future investments and expansion.
- User Engagement Increase: The rise in user engagement not only strengthens Duolingo's competitive position in the market but may also support its long-term growth, even though the stock has underperformed in the short term.
See More
Duolingo's Stock Plummets Despite Rising Revenue and Engagement
- Stock Price Drop: Duolingo's stock price was crushed on February 3, 2026, yet its revenue and user engagement continue to rise, indicating a potential undervaluation of its future prospects in the market.
- Cash Flow Growth: The company's free cash flow is on the rise, suggesting improvements in operational efficiency and profitability, which could yield potential returns for long-term investors despite the stock decline.
- Market Expectation Adjustment: The analyst team noted that Duolingo did not make the current list of top stocks, reflecting a cautious market sentiment regarding its future performance, which may impact investor confidence.
- Investment Opportunity Assessment: Despite facing challenges, the video analysis suggests that the current sell-off may present a rare buying opportunity for investors, especially as long-term growth potential becomes increasingly evident.
See More
Navigating Values in Investing Decisions
- Importance of Investment Education: Mark successfully sparked his children's interest in stock selection by playing investment games together, with his kids outperforming the market in 2025, demonstrating the significant potential of family education in fostering financial awareness.
- Values and Investment Decisions: An Italian investor explores the duality of Robinhood's tools while contemplating whether to hold its stock, emphasizing the importance of balancing personal values with social impact in investing, reflecting investors' concerns about ethical responsibility.
- Lessons from History: David Gardner reflects on past market fluctuations, highlighting that history is not just nostalgia but a source of confidence for investors, reminding them to maintain patience and optimism in uncertain markets.
- Optimism and Long-Term Investing: Tom shares his journey of wealth accumulation through long-term investing and compounding, emphasizing the key role of patience and a positive mindset in achieving investment success, encouraging more people to believe in their ability to succeed in investing.
See More
Hut 8 and Duolingo's Growth Potential
- Hut 8's Market Opportunity: Hut 8's stock price has more than doubled over the past year, primarily due to its pivot towards data centers, with Morgan Stanley estimating corporate spending on AI could reach $10 trillion; Hut 8 has over 9 gigawatts of data center capacity that is expected to drive significant growth for shareholders.
- Key Contract Signing: Hut 8 signed a $7 billion deal with Anthropic to supply 245 megawatts of power, with the total contract value potentially reaching $17.7 billion if all options are exercised, further solidifying its market position through strategic partnerships.
- Duolingo's Education Market: Duolingo's mobile education app is tapping into the $5 trillion global education market, with a 36% year-over-year increase in daily active users in Q3, showcasing its competitive edge as AI education technology gains traction.
- AI-Driven Growth: Duolingo plans to leverage AI to rapidly launch new content, enhancing user experience and reducing costs; the market's positive outlook on its $6 billion valuation indicates strong long-term growth potential in the education sector.
See More
Hut 8 and Duolingo's Growth Potential
- Hut 8's Market Performance: Hut 8's stock price has more than doubled over the past year, primarily due to its pivot towards data centers, with Morgan Stanley estimating corporate spending on AI could reach $10 trillion, and Hut 8 has over 9 gigawatts of data center capacity that can significantly drive shareholder growth.
- Key Contract Signing: Hut 8 signed a $7 billion deal with Anthropic to supply 245 megawatts of power, with the total contract value potentially reaching $17.7 billion if all options are exercised, positioning the company for long-term benefits through this strategic partnership.
- Duolingo's Market Opportunity: Duolingo's mobile education app is tapping into the $5 trillion global education market, with AI-driven educational technology expected to drive long-term market growth, and despite a stock price decline, its market potential remains substantial.
- Strong User Growth: Duolingo reported a 36% year-over-year increase in daily active users in Q3, and the application of AI technology will further enhance user experience and profitability, with a market cap of $6 billion indicating significant upside potential in the education market.
See More
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- Robinhood User Growth: Robinhood Markets added 2.5 million users in Q3 2025, bringing total funded accounts to 26.8 million, and despite a 9.87% drop in stock price, its robust user growth and trading volume present a buying opportunity.
- Micron AI Demand Surge: Micron Technology achieved a 57% year-over-year revenue growth in Q1 FY2026, driven by strong demand for AI memory, with stock price up over 45% year-to-date, highlighting its leadership in the memory market.
- Duolingo User Engagement Boost: Duolingo reported a 41% revenue increase in Q3 2025, reaching 50 million daily active users, and despite a 24% stock price drop, a 34% growth in paid subscribers indicates the educational platform's ongoing appeal.
- Optimistic Market Outlook: Despite facing short-term challenges, the fundamentals of Robinhood, Micron, and Duolingo all indicate strong growth potential, suggesting that investors may consider positioning themselves at current price levels for long-term gains.
See More
