Duolingo Inc. (NASDAQ:DUOL) shares are down during Friday’s premarket session following the company’s recent earnings report, which highlighted strong user growth but also indicated a shift in focus towards enhancing the free learner experience.

Several major firms lowered their ratings and sharply reduced their price forecasts following the earnings report. Notably, Morgan Stanley downgraded the stock to Equal Weight and slashed its price forecast to $100 from $245, citing mounting concerns about the company's growth trajectory.

Bookings Surpass $1 Billion In 2025

“We closed 2025 with strong momentum, surpassing 50 million daily active users and generating more than $1 billion in bookings for the first time,” said Luis von Ahn, Co-Founder and CEO of Duolingo, in a press release on Thursday.

“At the same time, advances in AI are fundamentally reshaping how people learn, and we believe this is a pivotal moment for our company. In 2026, we are deliberately prioritizing user growth and teaching better. We’ll focus on improving the free learner experience to grow word of mouth and feed our next user growth engines like chess, math, and music, even though that moderates near-term financial growth.”

“We believe this strategy ...