• Morgan Stanley recently reiterated its positive stance on Duolingo while voicing caution ahead of the upcoming earnings report, citing the risk that initial fiscal year 2026 bookings guidance may lag analyst expectations as management emphasizes user growth.
• The broker also highlighted stabilizing daily active user trends and ongoing efforts to improve acquisition and retention, underlining how product and engagement initiatives remain central to Duolingo’s longer-term outlook.
• We’ll now examine how Morgan Stanley’s cautious commentary on fiscal year 2026 bookings guidance could influence Duolingo’s existing long-term growth narrative.

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Duolingo Investment Narrative Recap

To own Duolingo, you need to believe its large and engaged user base can support growing bookings over time, even as competition and AI alternatives intensify. Morgan Stanley’s caution around potential fiscal 2026 bookings guidance mainly affects the near term earnings setup rather than the underlying user growth story, though it does sharpen the focus on whether Duolingo can align guidance with already high expectations.

Against that backdrop, the upcoming Q4 2025 earnings release on February 26, 2026 looks especially important. Recent results have shown Duolingo scaling revenue into the hundreds of millions of US dollars per quarter, and management’s commentary there will likely frame how investors think about the balance between bookings, user growth, and the newer monetization levers like Max and Energy that underpin the current catalyst narrative.

Yet beneath the headline growth story, investors should also be aware of the risk that rising competition and AI alternatives could eventually reduce the incentive to pay for structured learning...

Duolingo's narrative projects $1.7 billion revenue and $368.7 million earnings by 2028.

Uncover how Duolingo's forecasts yield a $270.74 fair value, a 141% upside to its current price.

Exploring Other Perspectives

While Morgan Stanley is cautious on near term bookings, the most optimistic analysts once expected revenue to reach about US$1.9 billion and earnings US$413 million, which shows just how far apart views on Duolingo’s long run user growth and AI powered product edge can be and why this latest guidance debate could prompt many of you to revisit which narrative you believe in.

Explore 31 other fair value estimates on Duolingo - why the stock might be worth over 4x more than the current price!

Build Your Own Duolingo Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Duolingo research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Duolingo research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Duolingo's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.