BofA Securities downgraded Duolingo (NASDAQ:DUOL) to Underperform from Neutral. Analysts lowered the price target to $93 from $103.
The bank cites valuation concerns as the primary driver for the downgrade. Duolingo shares trade at a significant premium compared to mid-cap subscription peers with similar profit outlooks.
Analysts cut 2027 bookings growth forecasts and EBITDA estimates due to long-term uncertainty. They highlighted execution risks involving a new app focused on voice interaction and advanced tutoring.
The stock has rallied over 20% since early June. BofA attributes this surge to an uptick in monthly active users rather than clear product-driven demand.