Duolingo (DUOL) Stock Forecast & Price Target

Duolingo Inc demonstrated robust financial performance in its latest quarter, reporting an adjusted EBITDA of $80 million, which marks a significant year-over-year increase of $32.5 million, primarily driven by strong revenue growth. The company also saw a positive trend in subscriber metrics, with paid subscribers reaching 11.5 million, surpassing consensus estimates and reflecting a continued strength in converting free users to paid memberships. Additionally, total revenues grew by an impressive 41.1% year-over-year, indicating strong demand for Duolingo's diverse learning solutions and potential for future growth.

Duolingo's gross margins demonstrated a slight decline, falling from 72.9% in the previous year to 72.5%, suggesting potential challenges in subscriber retention and penetration rates. Additionally, the company has provided a lower-than-expected guidance for 4Q25, with bookings and adjusted EBITDA both projected to come in below consensus estimates, indicating a slowdown in growth. Furthermore, rising costs associated with generative AI and hosting are contributing to a year-over-year decline, while the company’s exposure to direct-to-consumer spending may face headwinds from changing consumer discretionary behaviors.