Duolingo (DUOL) Stock Down 80% From Highs — Is It Now a Bargain?

TLDR

• Duolingo stock has fallen 80% from its May 2025 peak of $544.93, now trading around $103
• Q4 2025 revenue hit $282.9M, up 35% year-over-year, with a 40% net profit margin
• Stock trades at just 12.5x earnings and 13.4x free cash flow — well below typical growth stock valuations
• Quent Capital increased its DUOL position by 21,133.9% in Q4, buying 12,469 new shares
• Goldman Sachs boosted its stake by 123.9%; average analyst price target sits at $206.16

Duolingo had a remarkable run into May 2025. The stock had tripled in 52 weeks, the green owl was everywhere, and investors couldn’t get enough.

Duolingo, Inc., DUOL

Then it all reversed.

From that May 2025 peak of $544.93, DUOL has dropped roughly 80%, now sitting around $103. Two things spooked investors: the rise of AI translation tools like DeepSeek, and management’s decision to prioritize user growth over short-term profits.

Wall Street read that as a threat. The market sold off hard.

But the actual business numbers haven’t collapsed. In Q4 2025, Duolingo reported revenue of $282.9 million — up 35% year-over-year — and beat earnings estimates by posting $0.91 EPS against a $0.79 consensus. Net margin came in at 39.91%.

Those are not the numbers of a company in trouble.

The stock now trades at a price-to-earnings ratio of 12.14 and a PEG ratio of 0.70. That kind of valuation is usually reserved for slow, mature businesses — not ones growing revenue at 35% annually.

Institutional Money Is Moving In

Despite the selloff, some institutional investors are buying. Quent Capital LLC increased its position by 21,133.9% in Q4, adding 12,469 shares to hold 12,528 total, worth around $2.2 million at quarter-end.

Goldman Sachs raised its DUOL stake by 123.9% in Q1, now holding 87,556 shares worth roughly $27.2 million. Amundi lifted its holdings by 142.1%, and NewEdge Advisors grew its position by 1,868.2%.

Institutional investors now own 91.59% of the company’s stock.

On the insider side, the picture is mixed. Executives including Natalie Glance and General Counsel Stephen C. Chen sold a combined 14,939 shares last quarter, worth about $1.68 million. Insiders hold 15.67% of the company.

Analyst Ratings Stay Cautious

Analyst opinion is split. Four analysts rate DUOL a Buy, sixteen say Hold, and three have it at Sell. The average price target is $206.16 — roughly double the current price.

Recent downgrades have been sharp. Citigroup cut its target from $270 to $101. Barclays dropped its target from $230 to $110. Needham, still bullish, slashed its target from $300 to $145 but kept a Buy rating.

Weiss Ratings moved to Sell this week. Zacks followed with a Strong Sell in March.

Duolingo’s chess course, launched recently, now has over 7 million daily users — and that’s without the app appearing in chess-related app store searches. The Max subscription tier uses AI to explain errors and drive conversations in a paid premium layer.

The 52-week range for DUOL sits between $87.89 and $544.93. The stock’s 50-day moving average is $100.89, while the 200-day sits at $164.98. Market cap stands at $4.86 billion.

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