Duolingo stock price continued its strong downward trend on Thursday, reaching its lowest level since February 2023. DUOL has tumbled from $544 in May 2025 to the current $92.
This retreat has brought its market capitalization from over $28 billion to the current $5.5 billion. So, what next for the stock?
Duolingo stock price crashed after earnings
Duolingo, a highly popular company, has plunged in the past few months as concerns about its business being disrupted by artificial intelligence tools.
These concerns have jumped recently as investors’ assets and the top industries that will be disrupted by the technology.
Duolingo share price continued its freefall after the company published its financial results, which showed that its business continued growing in the fourth quarter.
The numbers showed that its daily active users rose to 52.7 million, up by 30% YoY.
Also, the number of paid subscribers rose by 28% to over 12.2 million, while its revenue jumped by 39% to over $1.03 billion. Most notably, its total bookings jumped by 33% to over $1.1 billion.
Duolingo’s profitability continued to gain momentum. Its adjusted EBITDA rose by nearly 30% to over $305 million, while the free cash flow rose to $360 million.
READ MORE:Buy Duolingo stock as its growth ambitions are ‘far grander’ than previously thought
Still, despite this growth, investors believe that the business will ultimately be disrupted by AI, with people using tools made by companies like Anthropic and OpenAI to learn languages.
In a statement, the company’s CEO noted that its priorities will be on incorporating more video calls on its application, adding more AI-powered speaking, and adding more advanced content.
As part of this transition, the company decided to move “Video Call With Lilly” subscription from the Super Max to the Super tier.
At the same time, Duolingo aims to expand its business from just languages into other areas, including chess, math, and music.
Chess has become its fastest-growing business, a trend that may continue in the foreseeable future.
The goal is to increase its daily active users to over 100 million, much higher than the current 52.7 million.
On the positive side, Duolingo has now become a bargain, trading at 13x 2025 earnings.
This multiple makes it a bargain considering that the S&P 500 Index has a multiple of 22.
Also, its revenue growth in 2025 was 39%, while its EBITDA margin was 29.5%, giving it a multiple of 68%.
Duolingo share price technical analysis
The weekly chart shows that the DUOL stock price has been in a strong downward trend in the past few months, moving from a high of $544 last year to the current $92. This crash gained steam after publishing its financial results.
The stock remains below all moving averages and the Supertrend indicator.
Also, the Relative Strength Index (RSI) and the MACD indicators have continued falling.
Therefore, the most likely scenario is where the stock continues falling in the near term and then consolidates in the coming weeks.
Ultimately, the stock will bounce back as investors buy the dip.
READ MORE:Duolingo stock is crashing and T-Mobile may be to blame
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