Chegg (CHGG) AI Stock Analysis

• Market Cap: $173.71M
• Dividend Yield: N/A
• Average Volume (3M): 3.65M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.60
• Revenue Growth: -19.69%
• EPS Growth: -6735.07%
• Country: US
• Employees: 1,241
• Sector: Technology
• Sector Strength: 83
• Industry: Education & Training Services
• EPS (TTM): -0.06
• Shares Outstanding: 106,570,450
• 10 Day Avg. Volume: 5,269,916
• 30 Day Avg. Volume: 3,654,083
• PEG Ratio: 0.05
• Price to Book (P/B): 0.37
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 1.45
• Enterprise Value/Market Cap: 2.39
• Enterprise Value/Revenue: 0.16
• Enterprise Value/Gross Profit: 0.95
• Enterprise Value/Ebitda: -0.31
• 1Y Price Target: $1.00
• Price Target Upside: -38.65% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 3

• Rating: 41 Neutral
• Price Target: $1.50 ▼(-7.98%Downside)

Chegg's overall stock score reflects significant financial and operational challenges. Declining revenue, negative profitability, and a weak valuation are major concerns. Technical analysis indicates bearish momentum, while strategic initiatives highlighted in the earnings call offer some hope for future stabilization.

Positive Factors

Marketing strategy

Chegg's diversifying marketing strategy in an evolving environment suggests adaptability and potential for growth.

Strategic initiatives

Chegg is exploring strategic alternatives, which has the potential to unlock shareholder value.

Negative Factors

Financial performance

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

Market competition

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

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 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's financials indicate significant headwinds. The income statement shows declining revenues and profitability, while the balance sheet reflects high leverage and decreasing equity. Although cash flow from operations remains strong, the negative trends in profitability and equity raise concerns about financial stability and growth prospects.

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: Positive
• Last Price: 1.63
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• 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 1.63 is above the 20-day moving average (MA) of 0.99, above the 50-day MA of 0.76, and above the 200-day MA of 1.42, indicating a bullish trend. The MACD of 0.16 indicates Negative momentum. The RSI at 83.91 is Negative, neither overbought nor oversold. The STOCH value of 83.66 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	74 Outperform	$3.32B	11.88	31.14%	―	1.26%	140.30%
COUR	73 Outperform	$1.44B	―	-10.84%	―	7.26%	39.62%
UDMY	72 Outperform	$1.13B	―	-27.17%	―	5.43%	14.22%
Sector *	62 Neutral	$11.81B	10.34	-7.44%	2.91%	7.41%	-7.93%
GOTU	61 Neutral	$969.40M	―	-36.29%	―	58.34%	-602.43%
DAO	60 Neutral	$1.07B	52.63	25.15%	―	-2.04%	―
CHGG	41 Neutral	$173.71M	―	-148.48%	―	-19.69%	-6735.07%

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.

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.