Bank of America upgraded Duolingo Inc to Buy on Monday, arguing the market is undervaluing the language-learning app by viewing it too narrowly as an education product rather than a high-growth entertainment platform.
The bank said Duolingo’s “education app” framing misses a much larger opportunity, with its gamified design giving it entertainment appeal comparable to leading mobile games.
Bank of America set a $250 price objective, up from a Neutral stance, citing what it sees as an attractive valuation relative to long-term growth prospects.
The analysts said Duolingo’s rapid, bite-sized lessons deliver “superior entertainment value” versus many mobile games, while also turning idle time into productive use through language learning and other subjects. They pointed to a 95% annual subscriber rate and a 23% payer-to-daily-active-user ratio as evidence of a stronger value proposition than typical casual gaming apps.
Viewing the company through a gaming lens, Bank of America described Duolingo as a potential “high-growth gaming super-app” with access to a much larger addressable market. The firm estimates a total addressable market of roughly 3 billion casual mobile gamers, arguing Duolingo’s mechanics resonate with “time-filler” users who want quick, engaging experiences on their phones.
Analysts added that while Duolingo has historically relied on organic virality, performance marketing remains an underused lever that could accelerate user growth. With more than 150 language courses and newer gamified offerings such as Chess, Music and Math, the analysts believe the company could sustain a position as one of the world’s top five mobile gaming apps over the long term, drawing comparisons with established franchises like Roblox and Candy Crush.
But concerns remain around user quality and churn. Bank of America noted fears of slowing subscriber growth have driven a sharp pullback in the stock since mid-2025, with sequential net additions failing to grow year-on-year across several quarters. A large influx of daily active users in early 2025 also came with the lowest payer conversion rate on record, raising questions about potential churn once annual subscriptions expire.
However, the bank said clearer guidance and commentary in early 2026 could act as a “clearing event” for the shares.
From a valuation perspective, Bank of America argued Duolingo looks “too inexpensive” given its profitability and expected growth. The firm now values the company on an EV-to-EBITDA basis, applying a 22x multiple to 2027 estimates, in line with other high-growth subscription and consumer entertainment peers.
Shares of Duolingo were up 5.8% on Monday afternoon at around $186.66.