Simply Wall St
5 min read
Duolingo’s stock has recently seen its fair value estimate decrease from $289.81 to $271.05, a reduction of about 6 percent. Analysts have also increased their discount rate slightly from 7.10 percent to 7.15 percent, while trimming revenue growth expectations from 20.12 percent to 20.07 percent. This signals a more cautious sentiment about future risk and expansion. These changes reflect evolving views on Duolingo’s growth strategy, and readers interested in the shifting narrative should stay tuned to discover how to follow these ongoing updates.
Recent analyst coverage of Duolingo highlights a diverging mix of optimism and caution, with commentary reflecting both the company’s ongoing execution and the emerging challenges around valuation and user growth.
🐂 Bullish Takeaways
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Several firms, including Scotiabank, Citi, Needham, and UBS, maintain positive or Buy ratings on Duolingo, emphasizing ongoing operational excellence and strong quarterly results.
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Scotiabank praised Duolingo for delivering another “high-quality quarter” and highlighted the company’s “operational excellence” as an ongoing strength, even as product development shifts toward the long term.
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Both Needham and Citi view the recent post-earnings selloff as a potential “buying opportunity,” with Citi confident that Duolingo can execute on its evolving user growth strategy despite a shift away from immediate monetization.
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BofA cited Duolingo’s strong revenue performance against Street estimates ahead of its Q3 results, attributing its price target reduction more to broader stock market trends than company fundamentals.
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Analysts continue to recognize Duolingo’s effective product and globally recognized brand, while applauding management’s focus on strategic growth over short-term gains.
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Key reservations among bullish analysts remain around valuation, with several price targets lowered substantially (for example, UBS to $450 from $500, Scotiabank to $300 from $600, and Citi to $270 from $375) as prior upside appears more fully reflected in shares.
🐻 Bearish Takeaways
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Some analysts have shifted to a more neutral or negative outlook, with Wells Fargo initiating coverage at Underweight and Citizens JMP downgrading to Market Perform, both citing persistent concerns over user growth momentum and limited near-term catalysts.
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DA Davidson has taken a more cautious stance, moving to a Neutral rating (with price targets of $300 and then as low as $220) after proprietary data suggested slowing daily active user growth and the potential loss of users to competitors such as Chess.com.
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Wells Fargo raised concerns about the negative impact of artificial intelligence backlash on brand sentiment and warned of possible downside to fiscal 2027 estimates.
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Baird, while recognizing Duolingo’s product quality, hesitates to recommend the stock due to competitive risks and already robust valuation, noting that category risks could continue to pressure share performance.
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Overall, bearish and neutral analysts often highlight that Duolingo’s user growth deceleration, high valuation, and competition could limit upside and present ongoing headwinds for the stock.
