JP Morgan Lowers Duolingo Price Target to $500, Maintains 'Overweight' Rating

JP Morgan analyst Bryan Smilek has lowered Duolingo's price target to $500 from $580, a 14% decrease. Despite this, JP Morgan maintains its "Overweight" rating for the language-learning technology company. Based on 16 analysts' one-year price targets, the average target price is $478.41, implying a 32% upside from the current price. The average brokerage recommendation is 2.3, indicating "Outperform" status.

JP Morgan analyst Bryan Smilek has recently lowered Duolingo's price target to $500 from $580, a 14% decrease. Despite this adjustment, JP Morgan maintains its "Overweight" rating for the language-learning technology company. The decision comes ahead of Duolingo's second-quarter earnings report scheduled for August 6.

The average one-year price target among 16 analysts is $478.41, indicating a 32% upside from the current price of $361.95. The average brokerage recommendation is 2.3, which translates to "Outperform" status. This reflects a mixed sentiment among analysts regarding Duolingo's future performance.

The price target adjustment is primarily driven by concerns over decelerating user growth and subscription bookings. Third-party data from Sensor Tower shows a gradual slowdown in Duolingo's global daily active user (DAU) growth throughout the second quarter. While the overall growth rate remains strong, it has decreased from 51% in the first quarter to 39% year-over-year in the second quarter.

JP Morgan has trimmed its DAU estimates by approximately 1-4% through the second to fourth quarters of 2025, projecting year-over-year DAU growth of 42% in Q2, 39% in Q3, and 40% in Q4. The firm notes that investors are looking for second-quarter DAU growth of 40-42%, toward the lower end of management’s 40-45% guidance.

Despite these adjustments, JP Morgan remains positive on Duolingo's long-term prospects, citing its leadership position in the language learning market. The company maintains strong financial health with impressive gross margins of 72% and revenue growth of 39%. Duolingo's approximately 130 million monthly active users represent only about 18% of global online language learners and 7% of all global language learners, suggesting significant room for expansion.

Recent developments include JPMorgan raising its price target for Duolingo to $580, citing strong growth and effective user conversion strategies. Evercore ISI also increased its price target to $540, highlighting Duolingo’s competitive advantages and market leadership in online language learning. Conversely, DA Davidson lowered its price target to $500, although it noted that Duolingo’s user growth is surpassing expectations.

Duolingo held its 2025 Annual Meeting of Stockholders, where shareholders approved board nominees and Deloitte & Touche LLP as the company’s auditor. Meanwhile, Duolingo’s stock faced pressure following Apple’s announcement of a new Live Translation feature, which could introduce competition in language services. Despite this, Duolingo continues to demonstrate robust growth and investor interest, as evidenced by the recent analyst ratings and shareholder support.

References:
[1] https://www.gurufocus.com/news/2985879/duolingo-duol-price-target-lowered-by-jp-morgan-duol-stock-news
[2] https://za.investing.com/news/analyst-ratings/duolingo-stock-price-target-lowered-to-500-by-jpmorgan-on-user-growth-concerns-93CH-3792874
[3] https://www.ainvest.com/news/jpmorgan-downgrades-duolingo-recommends-buying-selloff-2507/
[4] https://finance.yahoo.com/news/duolingo-set-q2-bookings-beat-165847658.html