Duolingo (DUOL) Stock Forecast & Price Target

Duolingo Inc reported a significant increase in adjusted EBITDA to $80.0 million, reflecting a $32.5 million year-over-year growth primarily driven by strong revenue performance that exceeded expectations. The company also demonstrated continued strength in subscriber growth, with paid subscribers reaching 11.5 million, surpassing consensus estimates of 11.4 million, and is projected to see heightened engagement in December due to seasonal promotions. Moreover, Duolingo achieved impressive total revenue growth of 41% year-over-year, indicating strong demand for its diverse product offerings and a favorable market positioning within the education technology space.

Duolingo's gross margins showed a slight decline from the previous year, falling from 72.9% to 72.5%, indicating potential challenges in sustaining subscriber penetration among monthly active users. For the fourth quarter of 2025, the company's guidance for bookings and adjusted EBITDA fell below consensus estimates, which may signal weakening financial performance compared to market expectations. Additionally, rising generative AI and hosting costs contributed to a year-over-year decline, and Duolingo's direct-to-consumer exposure raises concerns over the impact of discretionary spending headwinds on its revenue growth prospects.