Needham analyst Ryan MacDonald has reiterated their neutral stance on CHGG stock, giving a Hold rating today.
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Ryan MacDonald has given his Hold rating due to a combination of factors related to Chegg’s new strategic direction. The company is shifting its focus towards growth in the Chegg Skilling business, which includes the language learning platform Busuu and the workforce upskilling/reskilling platform Chegg Skills. This shift aims to drive growth in the B2B segment rather than direct-to-consumer, with management optimistic about achieving double-digit growth.
While this strategic pivot is seen as a positive move in light of the challenges facing Chegg Study, there remains uncertainty about the potential cash generation from the business as it undergoes this transition. Additionally, there is a need for more clarity on how Busuu and Chegg Skills will differentiate themselves in their competitive markets. These uncertainties contribute to the decision to maintain a Hold rating until more information becomes available.
In another report released today, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a $1.00 price target.