Evercore ISI cuts Duolingo stock rating on slowing user growth
#Duolingo #Evercore ISI #Stock Rating #User Growth #Earnings Results #Price Target #Revenue Growth
📌 Key Takeaways
- Evercore ISI downgraded Duolingo's stock rating and significantly reduced price target
- Duolingo is shifting focus from monetization to user growth with new subjects
- Despite strategic challenges, Duolingo maintains strong profitability metrics
- Revenue growth is expected to decelerate significantly in 2025
📖 Full Retelling
Evercore ISI downgraded Duolingo Inc.'s stock rating from Outperform to In Line on Friday, February 27, 2026, and slashed its price target to $114 from $330, citing decelerating daily active user growth following the company's fourth-quarter earnings results. The stock currently trades at $117.45, down 69% over the past year, reflecting investor concerns about the company's growth trajectory. Despite the downgrade, Duolingo maintains impressive financial metrics with a 72% gross profit margin and remains profitable with a market cap of $5.44 billion. The company is strategically shifting its focus from monetization growth to user growth, investing in its free user value proposition and expanding into new subjects including Chess and Math. Additionally, Duolingo is enhancing its language teaching capabilities with AI features such as Video Call and Speaking Adventures. Evercore ISI lowered its 2027 EBITDA estimate by 27% in response to this strategic pivot, and expects revenue growth to decelerate from 35% year-over-year in the fourth quarter to 15%-18% in 2025, with EBITDA margin declining from 30% in fiscal 2025 to 25% in fiscal 2026.
🏷️ Themes
Stock Rating Downgrade, User Growth Strategy, Financial Performance
📚 Related People & Topics
Duolingo
American educational technology company
Duolingo, Inc. is an American educational technology company that produces learning apps and provides language certification. Duolingo offers courses on 42 languages, ranging from English, French, and Spanish to less commonly studied languages such as Welsh, Irish, and Navajo, and even constructed l...
Evercore
American financial services company
Evercore Inc., formerly known as Evercore Partners, is a global independent investment banking advisory firm founded in 1995 by Roger Altman, David Offensend, and Austin Beutner. The firm has advised on over $4.7 trillion of merger, acquisition, and restructuring transactions since its founding. Eve...
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try{ var _=i o; . if(!_||_&&typeof _==="object"&&_.expiry Netflix declines to match Paramount Skydance bid for Warner Bros This is where Deutsche Bank sees silver prices ending the year Gold prices steady near $5,200/oz; strong Feb gains on tap Nvidia CEO Huang said SaaSpocalypse narrative wrong, sees ’deep misunderstanding’ (South Africa Philippines Nigeria) Evercore ISI cuts Duolingo stock rating on slowing user growth By Investing.com Analyst Ratings Published 02/27/2026, 02:01 AM Evercore ISI cuts Duolingo stock rating on slowing user growth 0 DUOL 5.19% Investing.com - Evercore ISI downgraded Duolingo Inc. (NASDAQ:DUOL) to In Line from Outperform on Friday and slashed its price target to $114 from $330. The stock currently trades at $117.45, down 69% over the past year, according to InvestingPro data. The downgrade follows the company’s fourth-quarter earnings results, which showed decelerating daily active user growth. Duolingo is shifting its focus from monetization growth to user growth, investing in its free user value proposition and new subjects including Chess and Math. Despite the strategic challenges, the company maintains an impressive 72% gross profit margin and remains profitable with a market cap of $5.44 billion. The company is also working to improve its language teaching capabilities with additional AI features such as Video Call and Speaking Adventures. Evercore ISI lowered its 2027 EBITDA estimate by 27% in response to the strategic pivot. Duolingo’s outlook calls for revenue growth to decelerate from 35% year-over-year in the fourth quarter to 15%-18% in 2025. The company also expects EBITDA margin to decline from 30% in fiscal 2025 to 25% in fiscal 2026. Evercore ISI said the near-term opportunity for a material re-rating is significantly reduced and will wait for product-driven fundamental trends to stabilize before reconsidering its stance. InvestingPro analysis suggests the stock may be undervalued at current levels, with additional insig...
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