Shares of Duolingo slid 4.6% to $100.66 on April 23, hitting within pennies of Goldman Sachs's freshly lowered $100 price target. Goldman analyst Eric Sheridan cut the target from $105 to $100 while keeping a Neutral rating , issuing the revision Tuesday ahead of earnings following industry conversations and channel checks. The stock is now down roughly 80% from its May 2025 all-time high above $544, and with earnings due May 4, the stakes for shareholders could hardly be higher.
Goldman Has Slashed Its Target Three Times — And It Keeps Catching the Stock
Goldman cut its price target from $425 to $250 in November 2025, then to $105 in March 2026 — and now to $100. Each reduction has roughly tracked the stock's actual descent. The firm cited the potential longer-term impact that generative AI may have on the end demand landscape — meaning chatbots like ChatGPT and Claude can already tutor users in any language at near-zero cost. Investors have expressed heightened concerns around forward bookings growth and the near-term margin profile.
The Company Chose Growth Over Profits — And Wall Street Punished It
Duolingo guided bookings growth of just 10%–12% for 2026, signaling a clear trade-off between user growth and making money from subscribers. CEO Luis von Ahn is betting big: the company's goal is to reach 100 million daily active users , double its current base. To get there, Duolingo is giving lower-cost subscribers access to AI tools previously limited to premium tiers — essentially leaving money on the table to attract volume. That strategy gutted investor confidence: the stock fell 24% in February alone after the guidance was revealed.
The AI Threat Is Real but Not Simple
Language learning is no longer limited to structured lesson apps — large language models now enable real-time conversation practice, translation, and tutoring, often at little to no cost. Yet Duolingo's counter-argument has merit: its habit-forming design generates $1 billion in annual revenue with 72% gross margins.
A record 12.2 million users were paying for a subscription at the end of 2025, up 28% year over year. The question is whether engagement stickiness can outrun free AI alternatives.
May 4 Earnings Will Be the Real Verdict
Duolingo's 2026 guidance projects 15%–18% revenue growth with roughly 25% adjusted EBITDA margins (a measure of cash profitability). With the stock trading at roughly 12× trailing earnings — a fraction of its former premium — any earnings miss could send shares toward D.A. Davidson's $85 target. JPMorgan has already lowered its target to $92. For shareholders, the next two weeks will determine whether $100 is a floor or just a stop on the way down.