US Stock Market Move | Performance outlook for 2026 falls short of expectations, Duolingo (DUOL.US) plunges over 26% in pre-market trading.

On Friday, Duolingo (DUOL.US) plummeted more than 26% in pre-market trading, closing at $85.82. On the news front, the company reported an adjusted earnings per share of $0.84 for the fourth quarter, higher than analysts' expectations of $0.83. Revenue increased 35% year-on-year to $2.829 billion, also surpassing the market's widespread expectation of $2.7574 billion. However, the company's outlook for 2026 is much lower than Wall Street's expectations, with first-quarter revenue expected to be $2.885 billion, below the market's general expectation of $2.918 billion; full-year revenue is expected to be between $1.2 billion and $1.22 billion, also below the market's expectation of $1.26 billion. After the earnings announcement, institutions significantly downgraded Duolingo's rating and target price. Bank of Nova Scotia downgraded the company's rating from "outperform" to "perform in line with the industry" and slashed its target price by two-thirds, from $300 to $100. JPMorgan Chase downgraded Duolingo's rating from neutral to underperform and cut its target price from $200 to $95.