How Duolingo Stock Fell 23.6% in January

Shares of Duolingo (NASDAQ: DUOL) plunged 23.6% lower in January 2026, according to data from S&P Global Market Intelligence. The price drop continued a downtrend that started in 2025. The stock has backed down to prices not seen since March 2023, chiefly due to slower subscriber growth in a shaky global economy.

January continued the downtrend for similar reasons. The market pressure also increased when CFO Matt Skaruppa announced his departure after six years in the C-suite role.

A strategic pivot meets a CFO exit

Let me set the stage for January's drama.

In November 2025, Duolingo CEO Luis von Ahn sketched out a slightly different business plan for the next couple of years. The company had focused on profitable monetization in recent years, but some investors were spooked that Duolingo's subscriber growth slowed down in every category. So von Ahn adjusted his management strategy to optimize subscriber growth and teaching quality a bit more. He's not giving up on revenue and profits, but making larger investments in growth-boosting ideas.

Against this backdrop, Duolingo's stock price continued to slide in November and December. After the Happy New Year celebrations (Gott nytt år, Feliz Año Nuevo, Frohes Neues, and so on) the downtrend just continued. On Jan. 8, Matt Skaruppa announced his departure without much market fanfare.

The CFO update was paired with updated guidance for the fourth quarter. Daily active users (DAUs) will come in just below the guidance target management provided in November, while bookings will land above the previously given guidance range.

That's the news, provided amid an unpredictable macroeconomic situation that makes many consumers think twice before spending time and money on personal improvement such as conversational Spanish.

Image source: Getty Images.

Why this Duolingo investor (and longtime user) isn't worried

Duolingo's critics can't point to an overvalued stock anymore. As of this writing on Feb 3, share prices are down 67% over the last year and the stock trades at just 15.3 times trailing earnings. That's pretty modest for a company with roughly 40% year-over-year revenue growth in each of the last six quarters.

Duolingo's stock hasn't been this affordable since its initial public offering in 2021 -- and I already mentioned the company's tremendous revenue growth. And there's more good news. Duolingo is already quite profitable with a 40% net profit margins over the last four quarters. Still not impressed? Duolingo generated $355 million of free cash flow on $964 million in top-line sales during the same period. The green owl is a cash machine.

Maybe I'm biased because my streak of daily Duolingo lessons will reach the 10-year marker in June 2026. The gamified learning experience clearly works for me. Either way, Duolingo is one of my best investment ideas right now, as I expect the company to keep growing its e-learning platform for years to come. The profitability will vary over time, and so will the growth rates, but the rising overall trend is unmistakable.

I can't promise that Duolingo's price drop will stop in February, but I see it as a wide-open buying window. Timing the market perfectly is the wrong kind of fool's errand. For investors with patience and a long time horizon, the former market darling hasn't been this affordable since its IPO.

Anders Bylund has positions in Duolingo. The Motley Fool has positions in and recommends Duolingo. The Motley Fool has a disclosure policy.