Chegg (CHGG) AI Stock Analysis

• Market Cap: $148.41M
• Dividend Yield: N/A
• Average Volume (3M): 2.65M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.77
• Revenue Growth: -25.87%
• EPS Growth: 57.21%
• Country: US
• Employees: 1,241
• Sector: Consumer Defensive
• Sector Strength: 50
• Industry: Education & Training Services
• EPS (TTM): 0.10
• Shares Outstanding: 108,326,990
• 10 Day Avg. Volume: 1,992,930
• 30 Day Avg. Volume: 2,651,733
• 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: 0.86
• Enterprise Value/Revenue: 0.25
• Enterprise Value/Gross Profit: 0.39
• Enterprise Value/Ebitda: -0.71
• 1Y Price Target: $1.50
• Price Target Upside: 9.49% Upside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 2

• Rating: 49 Neutral
• Price Target: $1.50 ▲(9.49% Upside)

Chegg's overall stock score reflects significant financial challenges, with declining revenues and profitability pressures being the most impactful factors. Technical analysis indicates mixed signals, with no strong trend emerging. Valuation concerns due to a negative P/E ratio further weigh on the score. While the earnings call highlighted some areas of growth, the overall outlook remains cautious.

Positive Factors

Earnings

Busuu revenue grew 15% year over year in the second quarter, showcasing strong performance in both B2B and B2C segments.

Financial Performance

Chegg Study/Study Pack monthly retention rate improved significantly, reaching 79.7% and showing a positive trend in user retention.

Negative Factors

Financial Guidance

Chegg's Q1 guidance was significantly below consensus expectations, indicating further degradation in revenue growth and margins.

Market Conditions

The ongoing evolution of study tools in an AI-driven environment has led to Chegg announcing a reduction in force to align the business.

Strategic Challenges

Chegg faces secular and competitive pressures impacting subscriber traffic and acquisition, limiting visibility in overcoming these headwinds.

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 several key streams. The primary source of income comes from subscription services, particularly Chegg Study, which offers students access to textbook solutions, expert Q&A, and other educational resources for a monthly fee. Additionally, Chegg Tutors provides on-demand tutoring services, charging students for sessions with tutors. The company also earns revenue from textbook rentals and sales, leveraging its platform to connect students with affordable educational materials. Partnerships with educational institutions and integrations with learning management systems further enhance its service offerings, contributing to its overall revenue. Advertising and affiliate marketing also play a role in its revenue model, allowing Chegg to monetize its platform through targeted promotions and collaborations with related educational services.

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: Positive
• Last Price: 1.37
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CHGG, the sentiment is Positive. The current price of 1.37 is above the 20-day moving average (MA) of 1.22, above the 50-day MA of 1.33, and above the 200-day MA of 1.30, indicating a bullish trend. The MACD of -0.02 indicates Negative momentum. The RSI at 56.71 is Neutral, neither overbought nor oversold. The STOCH value of 80.88 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CHGG.

Chegg Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LAUR	77 Outperform	$4.00B	16.02	25.81%	―	0.44%	35.19%
COUR	73 Outperform	$1.82B	―	-8.40%	―	7.10%	49.18%
UDMY	64 Neutral	$1.03B	―	-12.62%	―	3.93%	63.52%
DAO	63 Neutral	$1.09B	34.13	25.15%	―	-1.66%	―
Sector *	63 Neutral	$20.46B	14.51	-3.60%	3.15%	2.60%	-5.31%
GOTU	56 Neutral	$884.37M	―	-32.95%	―	56.38%	-16.84%
CHGG	49 Neutral	$148.41M	―	-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.