Duolingo (DUOL) Stock Forecast & Price Target

Duolingo Inc. reported an impressive 38.8% year-over-year revenue growth and achieved an adjusted EBITDA of $52.3 million, surpassing estimates and reflecting operational leverage. The company's daily active users (DAUs) reached 40.5 million, marking a robust increase of 50.6% year-over-year, while paid subscribers also showed strength, totaling 9.5 million, exceeding consensus expectations. With a healthy user engagement indicated by a 32% year-over-year growth in monthly active users (MAUs) and strong performance metrics, Duolingo's outlook appears favorable as it continues to build its subscriber base and expand its revenue streams.

Duolingo Inc. is experiencing a slowdown in daily active user (DAU) growth, with management projecting a significant deceleration to around 45% in the first quarter of 2025, which is expected to decline further in the second quarter. The company's guidance for fiscal year 2025 reveals a potential revenue growth of approximately 29.7% year-over-year; however, adjusted EBITDA expectations fall slightly below market forecasts, and gross margins have declined to 71.9%, down from 73.1% a year prior. Additionally, the anticipated deceleration in subscription bookings—projected to decrease by 13-23 points—and the increasing reliance on Duolingo Max revenue contribute to concerns regarding future profitability amid pressures from discretionary spending in a direct-to-consumer market.