The shift toward digital learning continues to create both winners and laggards in the education technology or EdTech space. Chegg (CHGG Quick QuoteCHGG - Free Report) and Duolingo (DUOL Quick QuoteDUOL - Free Report) represent two very different trajectories within this transformation. Chegg has long served college students through academic support and study tools. Duolingo has emerged as the world’s most popular language-learning application, expanding beyond languages into broader educational categories.

Both platforms leverage AI-driven personalization and subscription-based monetization. Both also see potential in lifelong learning trends. Yet the two companies now sit on opposite sides of the industry’s momentum curve, making their comparison uniquely relevant for investors assessing growth sustainability versus turnaround opportunity. 

Let’s dive deep and closely compare the fundamentals of the two stocks to determine which one is a better investment now.

The Case for Chegg Stock

Chegg is actively pursuing a transformation as core Chegg Study usage remains under pressure. Management continues to cite the rollout of Google AI Overviews as the primary driver of traffic and subscriber declines, with total subscriptions dropping 40% year over year to 2.6 million in the second quarter of 2025. Subscription Services revenues also fell 39% year over year, contributing to a 36% decline in total revenues to $105 million for the quarter. Still, Chegg exceeded guidance and delivered $23 million in adjusted EBITDA at a 22% margin, reflecting strong cost control and operational efficiency.

The company’s strategic direction centers on two emerging businesses: Busuu, its language learning subsidiary, and Skills, its platform for workplace readiness and professional upskilling. Busuu maintained positive momentum with a 15% year-over-year revenue increase, including 39% B2B growth and improved retention. Chegg expects Busuu to generate $48 million of revenue in 2025 and reach adjusted EBITDA breakeven in early 2026. Skills leverages a $40 billion addressable market and is showing improving traction, with enrollments rising 16% quarter over quarter and expanding product partnerships and offerings.

Chegg is simultaneously reshaping Chegg Study into a more interactive and personalized AI-driven learning assistant. New voice interfaces and smart planning tools aim to reinforce retention and differentiate Chegg from free solutions. Despite these innovations, student adoption remains an uphill battle due to competitive disruption and weaker discovery channels.

Recently, Chegg announced that following a year-long strategic review—where multiple options including a sale or going private were evaluated—the board unanimously decided the company will remain a standalone public entity. The leadership team is also shifting, with executive chairman Dan Rosensweig returning as president and CEO effective Oct. 27, 2025, while current CEO Nathan Schultz transitions to an executive advisor role. Chegg is implementing a major restructuring aimed at boosting cash flow and repositioning the business for growth in the $40+ billion skilling market. The company is adapting to reduced Google search traffic and the disruptive impact of AI on its academic business model. As part of the restructuring, Chegg will operate its academic learning products with a more efficient cost structure and will redirect resources to its skilling initiatives, which include language learning, workplace readiness, and AI-related educational programs. These professional and enterprise-focused offerings are anticipated to generate about $70 million in revenues in 2025, with expected double-digit growth in 2026. The restructuring includes a 45% reduction in workforce (388 roles), expected to cut 2026 non-GAAP expenses by $100–$110 million while incurring $15–$19 million in mostly cash severance charges.

Chegg reiterated its third-quarter 2025 revenue and adjusted EBITDA guidance, signaling confidence in business stability amid the transition. The company emphasized that its refreshed strategic focus—leveraging AI to serve learners and employers—aims to return Chegg to sustainable revenue and profitability growth over time.

(read more: Chegg Stock Plunges 9.2% in a Month: Time to Buy the Dip?)

The Case for Duolingo Stock

Duolingo continues to demonstrate category-leading execution, global user growth and increasingly powerful subscription economics. In the second quarter of 2025, daily active users rose 40% year over year to 47.7 million, paid subscribers increased 37% to 10.9 million and revenue surged 41% to $252.3 million. Net income grew 84% while margin expansion lifted adjusted EBITDA to $78.7 million at 31.2%, a remarkable combination of scale and profitability.

Duolingo’s growth flywheel remains driven by strong engagement and continuous product improvement. Recent changes, such as the rollout of its Energy mechanic to replace the Hearts system, have increased usage consistency and boosted subscription conversion. The company is successfully upselling users into its higher tiers, particularly Super and Max, with Max benefiting from AI-powered bilingual video conversation enhancements designed to accelerate real-world speaking skills.

New subject expansions are also broadening the company’s total addressable market. The Chess course has already surpassed one million daily active users and is expanding to Android and other UI languages to deepen audience engagement. Management continues to emphasize rapid iteration, monetization efficiency and a long-term mission to become a universal education platform rather than solely a language-learning app.

Financial guidance remains strong. Bookings growth is expected to exceed 32% for the full-year 2025 with continued improvements in profitability. Even broader improvements are anticipated as Duolingo scales direct web billing, which reduces reliance on app store fees and strengthens margin leverage.

Recent Stock Performance

Chegg’s stock has risen 44.2% in the past six months, driven largely by restructuring efforts and optimism surrounding the strategic review process. Duolingo shares are down 31.8% in the same period amid multiple expansion compression in high-growth Internet categories. Short-term stock movement currently favors Chegg, although long-term fundamentals still matter more for most investors.

Image Source: Zacks Investment Research

Valuations of CHGG & DUOL Stocks

A stark gap in valuation underlines their divergent expectations. Chegg’s market capitalization of approximately $113.7 million reflects investor caution over future revenue deterioration and strategic uncertainty. The company trades at around just 0.32X forward 12-month sales. Duolingo, meanwhile, commands a roughly $12.5 billion valuation and trades near 10.09X forward sales, a premium reflecting confidence in durable subscription growth, product adoption and margin scalability.

For context, other U.S.-listed online education peers trade somewhere in between these extremes. Coursera (COUR Quick QuoteCOUR - Free Report) , an online courses platform, has a market cap near $1.4 billion and a forward 12-month price/sales ratio of around 1.75X. Udemy (UDMY Quick QuoteUDMY - Free Report) , which focuses on user-generated skills courses, is about a $1.0 billion company trading at roughly 1.18X sales

Chegg’s valuation undoubtedly prices in significant pessimism but also leaves room for turnaround-driven upside if the new model stabilizes and strategic alternatives unlock shareholder value.

Image Source: Zacks Investment Research

Estimate Revision Trend For CHGG & DUOL Stocks

Analysts maintain cautious expectations for Chegg. The Zacks Consensus Estimate for 2025 loss per share remains unchanged at 11 cents, implying a substantial decline from earnings of 75 cents a year ago. Revenue is forecasted to decline 36.7% in 2025 and 9.7% in 2026, underscoring continued pressure on the core business. For 2026, Chegg is only expected to break even.
 

Image Source: Zacks Investment Research

Duolingo’s estimates tell a different story. The Zacks Consensus Estimate for 2025 EPS is unchanged at $3.16, a projected year-over-year improvement of 68.1%, followed by an additional 40.6% earnings growth expected in 2026. Revenue is forecasted to climb 36.2% in 2025 and another 26.1% in 2026, marking Duolingo as a high-visibility growth compounder.

The directional disconnect in analyst sentiment between the two companies remains difficult to ignore.

Image Source: Zacks Investment Research

Which Stock Has the Edge?

The divide between the two investment narratives is clear. Chegg represents a deeply discounted turnaround story with potential upside catalysts tied to a restructuring payoff and strategic transaction outcomes. However, visibility into revenue stability remains limited, and the long-term competitive outlook is still evolving.

Duolingo, by contrast, continues to deliver robust operating performance, international expansion, product-led monetization gains and margin improvement, supported by a strong balance sheet and consistent execution against a global learning opportunity.

Chegg currently holds a Zacks Rank #3 (Hold), while Duolingo maintains a Zacks Rank #2 (Buy), reflecting stronger earnings momentum in the latter. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Given its superior growth trajectory, expanding profitability and more favorable forward estimate trends, Duolingo stands out as the better long-term investment. While Chegg may appeal to event-driven investors seeking a potential rebound story, the company’s transformation remains a work in progress with heightened execution risk. Duolingo’s accelerating engagement and monetization initiatives across both language learning and new education verticals put it in a stronger position to sustain shareholder value creation.