Duolingo reported second-quarter revenue of $298.5 million, up 18% from a year earlier, and daily active users rose 23% to 58.7 million, results that arrived one day after Bank of America downgraded the stock to Underperform. BofA analyst Omar Dessouky cut his price objective to $93 from $103, implying roughly 31.5% downside from the $135.80 share price at the time, and questioned whether user growth can sustain the valuation. The firm noted that a June acceleration in monthly active users appeared tied to a temporary promotion, while Duolingo management attributed the Q2 user growth to product changes, marketing, and a one-time Streak Revival event that drew 15.4 million participants. BofA also cut its 2027 bookings growth forecast to 9% from 11% and lowered its 2027 EBITDA estimate to $338 million from $388 million, arguing the stock's premium over mid-cap subscription peers is hard to justify without more confidence in longer-term product-market fit.
Duolingo IncBofA downgraded Duolingo and cut price target, citing valuation concerns and lowered forecasts.
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