Duolingo Inc. is set to unveil major product updates at its annual Duocon conference on September 16, highlighting new video call features, an expanded Energy System, and non-language learning offerings, moves aimed at boosting user engagement amid slowing daily active user growth and intensifying AI competition.
Analysts at JP Morgan, Bryan Smilek and Doug Anmuth, reiterated an Overweight rating on Duolingo shares with a $515 price forecast, signaling nearly 90% upside from Friday’s close at $271.18.
The analysts said the stock’s 21% drop since second-quarter earnings reflects investor concerns over daily active user (DAU) growth, softer third-party data, and modest U.S. marketing spend in the second half of the year.
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Sensor Tower data indicates global DAU growth of 28% year-over-year in the third quarter to date, down from 39% in the second quarter, with August growth of 25% versus 31% in July.
Additional concerns center on the company’s ability to drive viral and edgy marketing following the departure of Global Senior Social Media Manager Zaria Parvez, intensifying competition from AI-powered platforms such as OpenAI GPT-5 and advancements in Google Translate, and the potential limits of market penetration.
At Duocon 2025, Duolingo is expected to spotlight enhancements to its Video Call feature, including bilingual conversation tools, gamification elements, interactive backgrounds, and longer session formats.
The company is also likely to highlight the broader rollout of its Energy System, a usage-based model replacing “Hearts” that has already improved engagement, time spent, and conversion rates across iOS users, with Android expansion underway.
The analysts noted that the content expansion remains a focus at Duocon, with over 148 new language course pairs, deeper CEFR-aligned English learning offerings, and the Duolingo Score to benchmark proficiency.
Beyond languages, Duolingo will showcase progress in non-language verticals like Chess, Math, and Music which collectively engage millions of DAUs and extend platform stickiness, though they are not expected to materially contribute to 2025 revenue.
While analysts do not expect significant updates to Duolingo’s broader marketing strategy at Duocon, AI applications remain a focal point, with the company leveraging generative AI and large language models to advance toward tutoring capabilities comparable to human instructors.
JPMorgan projects Duolingo’s 2025-26 average growth at +26% for FXN bookings, +44% for adjusted EBITDA, +50% for GAAP EPS, and +33% for free cash flow. Analysts expect “meaningful progress” toward management’s 30-35% long-term EBITDA margin target.
Duolingo’s ongoing efforts to refine its product, leverage AI, and expand into new learning verticals underpin analysts’ positive outlook, despite near-term concerns over user growth and market competition.
Price Action: DUOL stock is trading higher by 0.39% to $272.23 at last check Monday.
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