Duolingo $DUOL ( ▼ 1.63% ) is catching a bid after Bank of America upgraded the stock to buy and set a $250 price target, arguing the market is missing what the app really is.
Shares are still down more than 60% from their May 2025 peak, after slowing growth in metrics like daily active users pushed investors to slash long-term expectations. BofA says that reset has gone too far.
Not just education, more like entertainment
The core argument is simple. Duolingo should not be valued like a traditional education company.
BofA sees the app as closer to mobile entertainment, driven by gamified mechanics that look more like casual games than coursework. New offerings like Chess and Music reinforce that shift, expanding Duolingo’s appeal to users looking to fill idle time rather than learn a language with strict intent.
That framing opens up a much larger addressable market and a longer growth runway than investors are currently pricing in.
A valuation gap the market may be underestimating
BofA also points to valuation comparisons with gaming platforms like Roblox $RBLX ( ▼ 4.02% ) and mobile franchises owned by Microsoft $MSFT ( ▼ 1.19% ) . While Duolingo’s financial outlook looks similar in some respects, its valuation multiple is far lower, despite a high mix of annual subscription customers that provide recurring revenue.
The call is that if Duolingo continues to surprise on engagement and growth, the market could start assigning it a more game-like multiple over time.
Big upside, even after the pop
The $250 target implies roughly 30% upside from Monday morning levels, even after the stock posted its best single-day gain in about three months.
That said, perspective matters. Even at $250, Duolingo would still be more than 50% below its record closing high of $540.68 set last May.
The bet here is not a quick bounce, but a longer-term re-rating driven by the idea that Duolingo is less classroom and more console than the market currently believes.