Duolingo stock surges 5% as this analyst sees 42% upside

Duolingo stock rose more than 5% on Tuesday after Evercore ISI upgraded the language-learning company to Outperform from In Line and raised its price target to $210 from $105.

The new target implies nearly 42% upside from Monday’s close.

The upgrade comes as Duolingo works to expand user engagement and subscriber growth through artificial intelligence-enabled products.

The shares have declined more than 10% this year as the company has struggled to maintain paid subscriber growth and faced concerns about potential disruption from generative AI tools.

However, recent product developments and user activity data have led some analysts to take a more positive view of the stock.

Evercore sees AI supporting Duolingo growth

Evercore ISI analyst Mark Mahaney said the firm’s recent survey showed Duolingo has about four times the selection of its closest pure-play competitor. The survey also indicated that user satisfaction and daily usage have increased.

According to the survey, daily usage rose to 65% in 2026 from 61% in 2025. Mahaney attributed the improvement to recent AI-linked product changes.

Evercore has focused on the engagement impact of several AI-enabled products introduced by Duolingo this year.

These include spoken tokens, Flashcards and Speaking Adventures, a free lesson format that allows learners to complete real-world tasks by interacting with Duolingo characters.

The company has also reported a record current user retention rate of 84%, representing an increase of about 1 percentage point from a year earlier, according to Evercore.

Mahaney also argued that generative AI tools are unlikely to significantly undermine Duolingo’s business.

ChatGPT users interested in language learning are largely focused on travel, an area that Duolingo is less focused on because it is more difficult to monetize.

DA Davidson raises price target

DA Davidson also became more positive on Duolingo, raising its price target to $175 from $160 while maintaining a Buy rating.

Analyst Wyatt Swanson based the updated view on in-house data tracking activity among more than 170,000 existing Duolingo users.

The data showed continued strength in week-over-week daily active user growth, with the final week of August recording another increase.

DA Davidson estimates third-quarter daily active user growth could reach between 25.6% and 27.6% year over year.

August daily active users increased 1.3% month over month, compared with 0.6% in the firm’s previous update.

The week from Aug. 22 to Aug. 29 recorded 1.8% week-over-week growth, the strongest weekly increase since Duolingo’s streak revival event in early June.

Growth came from both older users returning to the platform and new users from more recent cohorts.

Wall Street remains divided on Duolingo

DA Davidson’s new $175 price target represents 23.5 times the firm’s 2026 EBITDA estimate and 18.5 times its 2027 estimate.

The firm also noted that its daily active user data has historically underestimated Duolingo’s reported results by 100 to 200 basis points.

Despite the positive calls from Evercore ISI and DA Davidson, broader analyst sentiment remains more cautious.

LSEG data shows that 17 of the 25 analysts covering Duolingo have a Hold rating on the stock.

The contrasting views reflect the debate around Duolingo’s ability to sustain user and paid subscriber growth while navigating the impact of generative AI on language learning.

For now, recent engagement data and the company’s expanding portfolio of AI-enabled products have provided a more positive backdrop for the shares, even as Duolingo remains below its levels at the start of the year.