Chegg (CHGG) AI Stock Analysis

• Market Cap: $137.48M
• Dividend Yield: N/A
• Average Volume (3M): 3.13M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.74
• Revenue Growth: -25.87%
• EPS Growth: 57.21%
• Country: US
• Employees: 1,241
• Sector: Consumer Defensive
• Sector Strength: 52
• Industry: Education & Training Services
• EPS (TTM): 0.10
• Shares Outstanding: 106,570,450
• 10 Day Avg. Volume: 3,098,257
• 30 Day Avg. Volume: 3,125,458
• PEG Ratio: >-0.01
• Price to Book (P/B): 0.86
• Price to Sales (P/S): 0.27
• P/FCF Ratio: 3.31
• Enterprise Value/Market Cap: 0.89
• Enterprise Value/Revenue: 0.24
• Enterprise Value/Gross Profit: 0.37
• Enterprise Value/Ebitda: -0.69
• 1Y Price Target: $1.50
• Price Target Upside: 16.28% Upside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 2

• Rating: 49 Neutral
• Price Target: $1.50 ▲(16.28% Upside)

Chegg's overall stock score is primarily impacted by its financial performance, which shows significant challenges with declining revenues and profitability pressures. The valuation is also a concern, with a negative P/E ratio and no dividend yield. While the earnings call provided some positive insights, such as cost reduction efforts and growth in specific segments, these are overshadowed by broader financial and operational issues. Technical analysis and corporate events further highlight the company's struggle to maintain stability in a competitive market.

Positive Factors

Business Strategy

Chegg is focusing on Chegg Skills and Busuu, expecting both to have strong performances in the future.

Partnerships

The company has executed two Q&A content licensing deals with top 10 tech companies, providing potential growth opportunities.

Strategic Review

Chegg's ongoing strategic review process, with early positive indications, could be a significant catalyst for the company.

Negative Factors

Financial Performance

1Q25 guidance for revenue and adjusted EBITDA fell materially below consensus expectations, raising concerns about financial health.

Growth and Margins

Chegg's growth trends are in negative territory, with margins compressing meaningfully, further pressuring the stock.

Market Competition

AI-powered search engines have significantly deteriorated non-subscriber traffic, impacting Chegg's web presence.

Chegg Business Overview & Revenue Model

Company Description

Chegg, Inc. is an American education technology company based in Santa Clara, California. It provides digital and physical textbook rentals, online tutoring, and other student services. Chegg primarily caters to college and high school students, offering a range of educational materials and resources to help with their academic and career success. The company's core products and services include textbook rentals, homework help, online tutoring, and study resources like Chegg Study, Chegg Writing, and Chegg Math Solver.

How the Company Makes Money

Chegg makes money through a variety of revenue streams. The primary source of revenue is its subscription services, which include Chegg Study, Chegg Writing, Chegg Math Solver, and Chegg Tutors. These services offer educational tools and resources on a subscription basis, providing students with access to step-by-step solutions, expert Q&A, writing assistance, and tutoring support. Another significant revenue stream is the rental and sale of textbooks, both digital and physical, which Chegg offers through its online platform. Additionally, Chegg generates revenue through advertising and partnerships with educational institutions and other companies in the education sector. These partnerships often involve integrating Chegg’s services into the educational offerings of these institutions, enhancing their reach and usability.

Chegg Financial Statement Overview

Summary

Chegg faces significant financial challenges, with declining revenues and profitability pressures. The income statement highlights operational inefficiencies, while the balance sheet shows moderate leverage improvements. Cash flow remains positive but is under strain. The company needs to address revenue growth and profitability to improve its financial health.

Income Statement

Chegg's income statement reveals significant challenges. The company has experienced declining revenues, with a TTM revenue decrease of over 10%. Profitability metrics are concerning, with negative net profit and EBIT margins indicating operational inefficiencies. The gross profit margin remains relatively strong at 66.6% for TTM, but overall, the income statement reflects a struggling financial performance.

Balance Sheet

The balance sheet shows a mixed picture. The debt-to-equity ratio has improved to 0.43 in TTM, indicating reduced leverage compared to previous years. However, the return on equity is negative, reflecting poor profitability. The equity ratio is not explicitly calculated, but the reduction in total assets and equity suggests a shrinking balance sheet. Overall, the balance sheet stability is moderate, with some improvements in leverage but ongoing profitability concerns.

Cash Flow

Cash flow analysis shows some resilience. Operating cash flow remains positive, although it has decreased over time. The free cash flow growth rate is negative, reflecting challenges in generating cash from operations. However, the free cash flow to net income ratio is positive, indicating some efficiency in converting earnings to cash. Overall, cash flow management is adequate but under pressure from declining revenues and profitability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	506.58M	617.57M	716.29M	766.90M	776.26M	644.34M
Gross Profit	328.11M	436.65M	528.60M	569.50M	521.36M	438.92M
EBITDA	-179.31M	-607.43M	183.80M	105.79M	86.77M	127.85M
Net Income	-271.91M	-837.07M	18.18M	266.64M	-1.46M	-6.22M
Balance Sheet
Total Assets	404.45M	868.95M	1.73B	2.47B	2.92B	2.25B
Cash, Cash Equivalents and Short-Term Investments	85.64M	315.72M	330.01M	1.06B	1.55B	1.15B
Total Debt	80.22M	504.46M	617.90M	1.21B	1.70B	1.53B
Total Liabilities	246.60M	675.97M	782.62M	1.35B	1.81B	1.64B
Stockholders Equity	157.86M	192.98M	944.62M	1.12B	1.11B	609.63M
Cash Flow
Free Cash Flow	32.31M	50.25M	163.15M	152.64M	179.04M	155.13M
Operating Cash Flow	77.35M	125.20M	246.20M	255.74M	273.22M	236.44M
Investing Cash Flow	347.62M	11.35M	268.67M	104.89M	-365.77M	-732.79M
Financing Cash Flow	-520.64M	-109.14M	-852.77M	-744.80M	466.72M	588.63M

Chegg Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.29
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• 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 1.29 is below the 20-day moving average (MA) of 1.40, below the 50-day MA of 1.35, and below the 200-day MA of 1.33, indicating a bearish trend. The MACD of <0.01 indicates Positive momentum. The RSI at 45.92 is Neutral, neither overbought nor oversold. The STOCH value of 15.30 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
LAUR	75 Outperform	$3.49B	14.43	25.81%	―	0.44%	35.19%
COUR	75 Outperform	$1.99B	―	-8.40%	―	7.10%	49.18%
UDMY	69 Neutral	$1.10B	―	-12.62%	―	3.93%	63.52%
DAO	54 Neutral	$1.05B	51.52	25.15%	―	-2.04%	―
GOTU	54 Neutral	$862.50M	―	-36.29%	―	58.34%	-602.43%
Sector *	50 Neutral	AU$2.04B	-0.17	-22.96%	9.17%	4.40%	-101.77%
CHGG	49 Neutral	$137.48M	―	-103.91%	―	-25.87%	57.21%

Chegg Corporate Events

Chegg Holds 2025 Annual Stockholders Meeting

On June 4, 2025, Chegg, Inc. conducted its 2025 Annual Meeting of Stockholders. The meeting was a significant event for the company, providing insights into its strategic direction and potential impacts on its operations and stakeholder interests.

The most recent analyst rating on (CHGG) stock is a Hold with a $3.00 price target. To see the full list of analyst forecasts on Chegg stock, see the CHGG Stock Forecast page.

Chegg Announces Major Workforce Restructuring Plan

On May 12, 2025, Chegg announced a restructuring plan that involves reducing its global workforce by approximately 22%, impacting 248 employees, and other measures to streamline operations. This decision is in response to ongoing industry challenges affecting the business, such as a decline in traffic. The company expects to incur charges between $34 million and $38 million, primarily for employee transition and severance payments, with most charges anticipated by the fourth quarter of 2025. Chegg also negotiated an early termination of its Santa Clara headquarters lease, effective December 31, 2025, which will reduce lease obligations by $5.3 million.

The most recent analyst rating on (CHGG) stock is a Hold with a $3.25 price target. To see the full list of analyst forecasts on Chegg stock, see the CHGG Stock Forecast page.