Duolingo, Inc. (NASDAQ:DUOL) and Coursera, Inc. (NYSE:COUR) have both lost close to 60% of their value over the past twelve months.
One reading of the derating is that software that teaches people things is worth less in a world where a chatbot can teach people things. Duolingo closed Monday at $134.30 and Coursera at $4.64.
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Duolingo Already Earns Money, and That is the Problem:
Duolingo is the profitable one. It converts 11.68% of its $1.15 billion in revenue into operating profit and returns 34.42% on equity. Reported net income of $410.77 million sits well above that operating profit, so the trailing figure carries items from below the operating line and is not a clean read on the business.
It also holds $1.31 billion of cash against $86.14 million of debt, so nothing about its position depends on raising money.
Revenue grew 18.3% last quarter. That is a respectable figure, and it is far below what this company used to deliver. Earnings fell 26% year over year.
That combination explains the derating. The shares changed hands at more than 200 times earnings in mid 2025 and now trade near 18 times what analysts expect next year. Part of that came from the 59% fall in the price and part from earnings rising, but the direction is the same either way. A business growing at 18% never supported the first number.
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Coursera Has to Slow Down Before it Ever Turns a Profit:
Coursera grew revenue 59.6% in the most recent quarter. That is more than three times Duolingo’s rate, and it is the single most surprising number either company reports.
The catch is that none of it reaches the bottom line. Coursera’s operating margin is only slightly negative at 1.64%, but the net loss over the past twelve months reached $136.3 million on $885.4 million of revenue, so the damage sits below the operating line.
Its balance sheet is unusually defensive for a loss-making company. Coursera holds $982.2 million of cash against less than $10 million of debt, on a market value of $1.33 billion.
The valuation gap is wide on the same measure for both. Coursera trades at about 1.5 times sales, against roughly 5.4 times for Duolingo.
The risk is straightforward. Growth at that rate has to slow eventually, and Coursera needs the slowdown to arrive after profitability rather than before it.
There is a reason to think the demand is durable. Coursera sells credentials to people retraining for work that is changing, and the same technology blamed for breaking consumer learning apps is what makes that retraining necessary.
Whether the company can charge enough for it remains unproven.
Conclusion:
These two stocks fell for the same reason and now offer opposite propositions. Duolingo is the higher quality business by some distance, and at about 18 times forward earnings it is no longer expensive. Set against that, its growth has slowed sharply while earnings went backwards, and a consumer app faces the AI question far more directly than an enterprise credential platform does. Coursera is far cheaper on sales and growing three times faster, but it has never turned any of that into profit. One is a good business losing momentum. The other is a cheap one that has yet to work. Neither has answered the question that halved them both.
Market Sentiment:
Duolingo, Inc. was held by 39 hedge funds with a combined stake value of about $760 million at the end of Q2 2026 in the Insider Monkey database. This is up from 37 hedge fund holders with a cumulative investment value of around $470 million in the previous quarter. Coursera, Inc. was held by 27 hedge funds with a combined stake value of roughly $260 million, down from 30 hedge fund holders in the previous quarter.
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This article is originally published at Insider Monkey.
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