Chegg (CHGG) AI Stock Analysis

• Market Cap: $71.83M
• Dividend Yield: N/A
• Average Volume (3M): 1.41M
• Price to Earnings (P/E): ―
• Beta (1Y): 2.14
• Revenue Growth: -32.37%
• EPS Growth: 90.99%
• Country: US
• Employees: 1,241
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Education & Training Services
• EPS (TTM): -0.01
• Shares Outstanding: 109,273,110
• 10 Day Avg. Volume: 1,294,080
• 30 Day Avg. Volume: 1,414,811
• PEG Ratio: 0.01
• Price to Book (P/B): 0.84
• Price to Sales (P/S): 0.27
• P/FCF Ratio: -7.91
• Enterprise Value/Market Cap: 1.74
• Enterprise Value/Revenue: 0.33
• Enterprise Value/Gross Profit: 0.55
• Enterprise Value/Ebitda: 8.15
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 2
• EPS Forecast (FY): -0.21
• Revenue Forecast (FY): $222.21M

• Rating: 43 Neutral
• Price Target: $0.64 ▼(-30.00% Downside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is held down primarily by weak financial performance (declining revenue, ongoing losses, and negative free cash flow) and bearish technicals (below key moving averages with negative MACD). Positives from the earnings call—cost cuts, EBITDA guidance, and Skilling momentum—provide some offset, but near-term cash needs and listing risk keep the overall profile low.

Positive Factors

Skilling Revenue Momentum

A growing Chegg Skilling business provides durable revenue diversification away from legacy academic services. $18M Q4 and guidance for continued double‑digit growth indicate a scalable product line addressing a ~$40B addressable market, improving long‑term revenue mix and growth potential.

Cost Reductions and Margin Targets

Structural opex cuts and targets to reduce non‑GAAP operating expenses materially narrow the cost base. Management's goal of 20%+ adjusted EBITDA and sub‑$250M opex for 2026 supports sustainable margin expansion and a clearer path to self‑funding as revenue stabilizes.

Active Debt Reduction

Proactive repurchases of convertible notes and stated objective to end 2026 debt‑free reduce refinancing and liquidity risk. Lower gross leverage improves financial flexibility, eases interest/convertible overhang, and strengthens the balance sheet for multi‑quarter strategic execution.

Negative Factors

Sustained Revenue Declines

Multi‑year revenue declines weaken operating leverage and limit the firm's ability to absorb fixed costs. Persistent top‑line contraction raises the bar for Skilling to offset legacy deterioration and delays reestablishing consistent profitability and return metrics over the medium term.

Weak Free Cash Flow

A deterioration to negative FCF reduces internal funding for restructuring, marketing, and skilling investments. Combined with expected severance outflows, this structural cash conversion weakness may necessitate external financing or asset sales, constraining strategic optionality.

NYSE Listing/Compliance Risk

A delisting notice is a lasting governance and liquidity risk that could force a reverse split or other remedial actions. Listing uncertainty can impair institutional participation, employee retention and partnership confidence, adding structural downside to capital access.

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 generates revenue through multiple streams, primarily from subscription services and textbook rentals. Its subscription model includes Chegg Study, which offers step-by-step textbook solutions, expert Q&A, and access to a library of study materials. Additionally, Chegg earns income from textbook rentals and sales, allowing students to rent or purchase academic materials at competitive prices. The company also monetizes services like Chegg Tutors, connecting students with tutors for personalized learning experiences. Strategic partnerships with educational institutions and content providers enhance its offerings, further driving user engagement and revenue growth.

Chegg Financial Statement Overview

Summary

Overall fundamentals remain weak: multi-year revenue declines and recurring losses (including a sizable net loss in 2025) outweigh improved leverage from debt reduction. Cash flow quality also deteriorated, with free cash flow turning negative in 2025 after prior positives, reducing confidence in near-term self-funding.

Income Statement

Revenue has been in sustained decline (down ~16% in 2025 vs. 2024, and negative growth in each of the last four years), pressuring operating leverage. Profitability is weak: 2025 shows a sizable net loss (about -27% margin) and negative EBITDA margin, following an extremely large loss in 2024; while losses narrowed sharply in 2025, the business has not re-established consistent earnings power versus the profitable 2022 and modestly profitable 2023. A positive is that gross margin remains relatively healthy (~60% in 2025), but it has compressed materially from prior years, highlighting pricing and/or cost pressure.

Balance Sheet

Leverage improved meaningfully: total debt fell sharply from 2024 to 2025, bringing debt relative to equity down to a more moderate level in 2025. However, equity and total assets have also contracted significantly over the period, and returns on equity are deeply negative in 2024–2025 due to losses, which weakens balance-sheet quality despite lower leverage. Overall, the balance sheet is less risky than a year ago, but profitability-driven erosion remains a key concern.

Cash Flow

Cash generation is mixed. Operating cash flow stayed positive in 2025, but dropped dramatically versus 2024, and free cash flow turned negative in 2025 after being positive in 2024 and 2023—signaling weaker cash conversion and/or elevated cash outflows. The company’s cash flow no longer consistently supports the income statement profile, and the sharp deterioration in free cash flow trajectory in 2025 is a notable risk even though operations still produced cash.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	376.91M	617.57M	716.29M	766.90M	776.26M
Gross Profit	226.86M	436.65M	490.35M	569.50M	521.36M
EBITDA	15.32M	-607.43M	183.80M	201.59M	86.77M
Net Income	-103.42M	-837.07M	18.18M	266.64M	-1.46M
Balance Sheet
Total Assets	276.82M	868.95M	1.73B	2.47B	2.92B
Cash, Cash Equivalents and Short-Term Investments	72.82M	315.72M	330.01M	1.06B	1.55B
Total Debt	84.17M	504.46M	624.74M	1.21B	1.70B
Total Liabilities	157.20M	675.97M	782.62M	1.35B	1.81B
Stockholders Equity	119.62M	192.98M	944.62M	1.12B	1.11B
Cash Flow
Free Cash Flow	-12.63M	50.25M	163.15M	152.64M	179.04M
Operating Cash Flow	15.49M	125.20M	246.20M	255.74M	273.22M
Investing Cash Flow	282.30M	11.35M	268.67M	104.89M	-365.77M
Financing Cash Flow	-428.48M	-109.14M	-852.77M	-744.80M	466.72M

Chegg Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 0.92
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CHGG, the sentiment is Neutral. The current price of 0.92 is above the 20-day moving average (MA) of 0.66, above the 50-day MA of 0.79, and below the 200-day MA of 1.14, indicating a neutral trend. The MACD of -0.04 indicates Negative momentum. The RSI at 45.45 is Neutral, neither overbought nor oversold. The STOCH value of 79.35 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CHGG.

Chegg Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AFYA	79 Outperform	$1.23B	9.64	15.51%	<0.01%	3.48%	12.63%
COUR	64 Neutral	$1.08B	-20.74	-8.27%	―	8.10%	43.35%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
LINC	61 Neutral	$1.15B	56.78	10.58%	―	16.90%	41.11%
UDMY	60 Neutral	$731.47M	205.31	1.87%	―	2.53%	95.79%
DAO	55 Neutral	$1.28B	86.38	―	―	-1.51%	155.73%
CHGG	43 Neutral	$71.83M	-0.68	-66.17%	―	-32.37%	90.99%

Chegg Corporate Events

Chegg Repurchases Convertible Notes to Reduce Outstanding Debt

On February 13, 2026, Chegg, Inc. entered into a privately negotiated agreement to repurchase $20.0 million in principal amount of its 0% Convertible Senior Notes due 2026 for a cash price of $19.4 million. The transaction, part of Chegg’s existing securities repurchase program, is expected to close on February 20, 2026, leaving $33.9 million of these notes outstanding and $122.4 million still available under the repurchase authorization.

The move effectively reduces Chegg’s outstanding convertible debt at a slight discount to face value and signals continued balance-sheet management ahead of the 2026 notes’ maturity. For stakeholders, the repurchase reflects the company’s use of capital to lower leverage while preserving significant capacity under its buyback program for future debt or equity repurchases, which may influence Chegg’s capital structure and earnings profile over time.

The most recent analyst rating on (CHGG) stock is a Hold with a $0.73 price target. To see the full list of analyst forecasts on Chegg stock, see the CHGG Stock Forecast page.

Chegg Repurchases Convertible Notes Under Ongoing Buyback Program

On December 23, 2025, Chegg, Inc. entered into privately negotiated agreements with certain holders of its 0% Convertible Senior Notes due 2026 to repurchase approximately $8.9 million in principal amount of these notes for about $8.3 million in cash, as part of its previously announced securities repurchase program. The transactions, expected to close on December 30, 2025 subject to customary conditions, will leave roughly $53.9 million of the 2026 notes outstanding and $141.8 million still available under the repurchase program, signaling continued balance-sheet management and capital-return efforts that could affect the company’s leverage profile and flexibility for future capital allocation.

The most recent analyst rating on (CHGG) stock is a Hold with a $0.88 price target. To see the full list of analyst forecasts on Chegg stock, see the CHGG Stock Forecast page.

Chegg Faces NYSE Non-Compliance Notice

On December 12, 2025, Chegg was notified by the NYSE of 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 plans to address this issue within a six-month period, potentially through a reverse stock split, to maintain its NYSE listing. The notice does not immediately affect Chegg’s stock listing, but failure to comply could lead to suspension and delisting.

The most recent analyst rating on (CHGG) stock is a Hold with a $0.89 price target. To see the full list of analyst forecasts on Chegg stock, see the CHGG Stock Forecast page.