Chegg (CHGG) AI Stock Analysis

• Market Cap: $52.94M
• Dividend Yield: N/A
• Average Volume (3M): 3.48M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.22
• Revenue Growth: -13.78%
• EPS Growth: -5297.96%
• Country: US
• Employees: 1,241
• Sector: Technology
• Sector Strength: 49
• Industry: Education & Training Services
• EPS (TTM): -8.13
• Shares Outstanding: 105,109,140
• 10 Day Avg. Volume: 3,058,340
• 30 Day Avg. Volume: 3,483,894
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.12
• Price to Cash Flow (P/CF): 1.00
• P/FCF Ratio: 1.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $1.30
• Price Target Upside: 170.83% Upside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 7

Chegg faces significant challenges, including declining financial performance, a negative valuation, and technical pressures. The NYSE delisting notice compounds these issues, reflecting a precarious situation. While there are positives, such as operational cash flow and strategic initiatives, the overall outlook remains concerning.

Positive Factors

Market Expansion

Progress on international localization efforts could expand Chegg's market reach and customer base.

Strategic Initiatives

Chegg is combating challenges with product innovation, new B2B sales initiatives, and a social media-focused marketing campaign to improve brand awareness.

Negative Factors

Competitive Landscape

The company's AI-fueled struggles continue as Google AIO negatively impacts web traffic.

Financial Performance

1Q25 guidance for revenue and adjusted EBITDA came in materially below consensus expectations.

Subscriber Trends

Declining negative growth and subscribers missing expectations supported the Underweight thesis for Chegg Inc.

Chegg Business Overview & Revenue Model

Company Description

Chegg, Inc. operates direct-to-student learning platform that supports students starting with their academic journey and extending into their careers with products and services to support and help them better understand their academic course materials. The company offers Chegg Services, which include subscription services; and required materials that comprise its print textbooks and eTextbooks. Its subscription services include Chegg Study, which helps students master challenging concepts on their own; Chegg Writing that provides students with a suite of tools, such as plagiarism detection scans, grammar and writing fluency checking, expert personalized writing feedback, and premium citation generation; Chegg Math, a step-by-step math problem solver and calculator that helps students to solve problems; Chegg Study Pack, a bundle of various Chegg Services product offerings, including Chegg Study, Chegg Writing, and Chegg Math Solver services, which creates an integrated platform of connected academic support services; Busuu, an online language learning solution that offers a comprehensive solution through a combination of self-paced lessons, live classes with expert tutors, and the ability to learn and practice with members of the Busuu language learning community; and Thinkful, a skills-based learning platform that offers professional courses along with networking, interviewing, and career services. The company also provides other services, such as Chegg Life, Chegg Prep, and Chegg Internships; provides personal and professional development skills training; and rents and sells print textbooks and eTextbooks. Chegg, Inc. was incorporated in 2005 and is headquartered in Santa Clara, California.

How the Company Makes Money

Chegg makes money through a subscription-based model, primarily driven by its Chegg Services, which include Chegg Study, Chegg Writing, and Chegg Tutors. These services offer students access to step-by-step textbook solutions, expert Q&A, plagiarism checks, and personalized tutoring. Additionally, Chegg generates revenue from textbook rentals and sales, both digital and physical. The company also partners with educational content providers and institutions to expand its offerings and reach. Subscription fees and rental transactions are the key revenue streams, with the majority of earnings coming from recurring subscription payments.

Chegg Financial Statement Overview

Summary

Chegg's financial performance is under strain with declining revenues and negative profitability, high leverage, and decreasing equity. Despite strong operating cash flows, the overall financial outlook indicates significant challenges.

Income Statement

Chegg's income statement reveals significant challenges. Both Gross Profit Margin and Net Profit Margin have deteriorated, with the latter turning negative in the most recent year. The Revenue Growth Rate has been negative over the last two years, indicating declining revenues. Additionally, EBIT and EBITDA margins have turned negative, reflecting operational inefficiencies and potential cost management issues.

Balance Sheet

The balance sheet shows a decrease in Stockholders' Equity and Total Assets over time. The Debt-to-Equity Ratio remains high, indicating significant leverage. The Return on Equity has turned negative, aligning with recent net losses. The Equity Ratio has decreased, reflecting a reduced proportion of equity in the company's asset base, suggesting higher financial risk.

Cash Flow

Chegg's cash flow presents a mixed outlook. Free Cash Flow has declined, but the company still maintains positive Operating Cash Flow. The Operating Cash Flow to Net Income Ratio is high due to negative net income. Despite the challenges, the company's ability to generate cash from operations remains a positive aspect.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
617.57M	716.29M	766.90M	776.26M	644.34M
	Gross Profit
436.65M	490.35M	569.50M	521.36M	438.92M
	EBIT
-737.11M	-67.72M	109.99M	12.63M	56.75M
	EBITDA
-607.43M	183.80M	105.79M	86.77M	127.85M
	Net Income Common Stockholders
-837.07M	18.18M	266.64M	-1.46M	-6.22M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
315.72M	330.01M	1.06B	1.55B	1.15B
	Total Assets
868.95M	1.73B	2.47B	2.92B	2.25B
	Total Debt
504.46M	617.90M	1.20B	1.69B	1.53B
	Net Debt
342.98M	482.14M	728.29M	836.52M	1.05B
	Total Liabilities
675.97M	782.62M	1.35B	1.81B	1.64B
	Stockholders Equity
192.98M	944.62M	1.12B	1.11B	609.63M
Cash Flow		Free Cash Flow
50.25M	163.15M	152.64M	179.04M	155.13M
	Operating Cash Flow
125.20M	246.20M	255.74M	273.22M	236.44M
	Investing Cash Flow
11.35M	268.67M	104.89M	-365.77M	-732.79M
	Financing Cash Flow
-109.14M	-852.77M	-744.80M	466.72M	588.63M

Chegg Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.48
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CHGG, the sentiment is Negative. The current price of 0.48 is below the 20-day moving average (MA) of 0.63, below the 50-day MA of 0.97, and below the 200-day MA of 1.81, indicating a bearish trend. The MACD of -0.14 indicates Negative momentum. The RSI at 31.02 is Neutral, neither overbought nor oversold. The STOCH value of 14.84 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CHGG.

Chegg Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ATGE	82 Outperform	$3.97B	19.16	14.63%	―	12.83%	97.16%
LRN	79 Outperform	$5.82B	22.36	22.95%	―	13.13%	56.75%
PSO	71 Outperform	$9.77B	19.08	10.99%	1.98%	-0.59%	24.06%
COUR	68 Neutral	$1.07B	―	-13.11%	―	9.27%	34.66%
UHAL	66 Neutral	$10.73B	28.96	5.61%	―	0.98%	-35.16%
Sector *	57 Neutral	$19.52B	9.58	-12.47%	2.79%	5.43%	-24.71%
CHGG	45 Neutral	$52.94M	―	-147.16%	―	-13.78%	-5297.96%

Chegg Corporate Events

Chegg Faces NYSE Delisting Notice for Low Share Price

On April 1, 2025, Chegg, Inc. received a notice from the New York Stock Exchange (NYSE) for non-compliance with the minimum share price requirement, as its average closing share price was below $1.00 over a 30-day period. The company intends to regain compliance within a six-month cure period, potentially through a reverse stock split, and will continue to trade on the NYSE during this time. Failure to comply could lead to suspension and delisting procedures.