Duolingo on pace for worst day since February

Language-learning app Duolingo is on track for its worst day since late February. There was little substantive news on the company, which reports Q2 numbers on August 6.

But analysts at Citizens JMP did cut their price target on the stock to $450 from $475, according to The Fly on the Wall, citing still soft numbers on the app’s new user growth. Analysts said that daily active user growth has decelerated from 53% in March to 37% in June.

Other analysts have spotted similar dynamics in recent weeks, saying the decline may in part be related to a LinkedIn post from Duolingo CEO Luis von Ahn that talked up the company’s plans to be an AI-first organization and mentioned in passing that it would be letting go of some contractors as a result. Cue social media backlash.

Von Ahn subsequently clarified the company’s position, stressing that he sees AI as a tool for humans to use at the company, not a replacement for them. And most analysts seem to think that over the long term, Duolingo remains a good bet. (That’s also the case with Citizens JMP, which has kept its “outperform” rating on the shares.)

But the price target downgrade does represent a crack in the view represented in the consensus price target of $492 a share for the stock. (It’s currently about 45% lower, at $337.)