Duolingo Plunges 63.8% in Past Year; Forecasts 15-18% Revenue Growth
Duolingo stock has dropped 63.8% over the past year while industry peers rallied more than 23% and rivals Amprius and LiveRamp gained 868.3% and 17.9%. Management forecasts 15-18% revenue growth in 2026 versus 39% in 2025 and warns of margin pressure from rising R&D and sales expenses.
1. Price Performance Plunge
Duolingo stock has fallen 63.8% over the past year, underperforming the industry’s 23.7% rally and trailing peers Amprius Technologies (up 868.3%) and LiveRamp (up 17.9%). Over the last six months, Duolingo shares have slid 67.5% compared with 117.7% and 9.8% gains at Amprius and LiveRamp, respectively.
2. Slowdown in User Growth and Revenue Outlook
During the fourth-quarter 2025 earnings call, management disclosed decelerating daily active user growth and set a 2026 DAU target of 20% year-over-year increase. Revenue is projected to rise just 15-18% next year versus 39% growth in 2025, with planned increases in R&D and sales and marketing expenses expected to depress adjusted EBITDA margins in the first half.
3. Overvaluation and Dividend Policy
Duolingo trades at 32 times forward 12-month earnings per share, well above the industry average of 22.44, and at 3.71 times forward sales versus a peer average of 2.44. The absence of a dividend forces shareholders to rely entirely on price appreciation, heightening risk during market downturns.
4. Shareholder Litigation Investigation
Faruqi & Faruqi, LLP has launched a securities litigation investigation into Duolingo, inviting investors who suffered significant losses to explore legal claims. This probe may increase regulatory scrutiny and cast uncertainty over past disclosures and corporate governance.