Goldman Sachs Maintains Neutral on Duolingo, Slashes Target to $250

Core Insights - Duolingo, Inc. is recognized as a leading EdTech stock, with recent performance indicating strong revenue growth and user engagement despite a cooling user growth rate [1][2] - Goldman Sachs has maintained a Neutral rating on Duolingo, reducing the price target from $425 to $250, reflecting concerns over user growth and conservative Q4 guidance [1][3] Financial Performance - For Q3 2025, Duolingo reported revenue of $271.7 million, representing a 41% year-over-year increase, with daily active users exceeding 50 million, up 36% [2] - The company attributes its revenue growth to consistent product upgrades and AI-assisted features that enhance user engagement and conversion to paid subscriptions [2] Business Model and Strategy - Duolingo operates a freemium learning platform primarily focused on language learning, with recent expansions into music and chess, utilizing a combination of ad-supported and paid tiers [3] - The company is implementing AI-driven personalization to improve user experience while pacing monetization efforts to maintain app quality [2][3]