Chegg (CHGG) AI Stock Analysis

• Market Cap: $78.68M
• Dividend Yield: N/A
• Average Volume (3M): 1.07M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.98
• 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: 1,248,208
• 30 Day Avg. Volume: 1,073,985
• 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: 1.57
• Enterprise Value/Revenue: 0.28
• Enterprise Value/Gross Profit: 0.44
• Enterprise Value/Ebitda: 8.02
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 45 Neutral
• Price Target: $0.75 ▼(-18.48% Downside)

The score is driven primarily by weak financial performance (declining revenue, losses, and sharply lower free cash flow) and a soft technical trend (below key moving averages with negative MACD). Offsetting factors include earnings-call progress on cost reductions and skilling growth guidance, but listing-compliance risk and restructuring/execution uncertainty keep the overall score constrained.

Positive Factors

Gross margin resilience

A ~65% gross margin reflects the high-margin, digital subscription nature of Chegg's core offerings. This structural advantage supports investment in content and platform improvements, and provides operating leverage that can help restore profitability as revenue stabilizes over the medium term.

Skilling business growth

The pivot into workforce skilling with sustained double-digit growth provides important revenue diversification away from legacy student workflows. Structural demand for reskilling/upskilling offers a steady market tailwind and a path to rebuild top-line momentum over the next 2–3 years.

Material operating cost cuts

Substantial opex reductions and an explicit target to shrink recurring costs materially improve the company’s operating leverage. Lower fixed costs increase the chance of durable profitability and positive free cash flow once revenue pressures ease, strengthening long-term capital flexibility.

Negative Factors

Sustained revenue decline

A multi-period top-line contraction reflects secular challenges: lower organic traffic, AI disruption, and subscriber loss. Persistent revenue erosion undermines scale economics, limits marketing ROI, and makes it harder for cost cuts alone to restore sustainable growth and margins over the medium term.

Severe free cash flow deterioration

A large drop in free cash flow constrains reinvestment and heightens reliance on financing or asset management to fund operations. Weak cash conversion reduces resilience during restructuring and delays the company's ability to deleverage or pursue strategic investments that support long-term recovery.

Listing compliance and execution risk

An NYSE minimum-share-price notice introduces execution and governance risk: management time shifts to compliance, a reverse split could impair liquidity and investor perception, and delisting risk would materially disrupt capital access during an already delicate restructuring period.

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

Weak fundamentals: revenue is shrinking (TTM -11.62%) with negative profitability (negative net profit and EBIT margins). Gross margin is still solid (64.77%), but free cash flow deterioration (TTM FCF growth -76.23%) and negative ROE point to ongoing financial strain despite more manageable leverage (debt-to-equity 0.51).

Income Statement

Chegg's income statement shows a declining trend in revenue with a negative growth rate of -11.62% in the TTM period. The company is struggling with profitability, as indicated by negative net profit and EBIT margins. Gross profit margin remains relatively strong at 64.77%, but the overall financial health is impacted by significant losses.

Balance Sheet

The balance sheet reflects a moderate debt-to-equity ratio of 0.51 in the TTM period, indicating manageable leverage compared to previous years. However, the return on equity is negative, highlighting challenges in generating returns for shareholders. The equity ratio is not provided, but the overall stability is affected by past high leverage.

Cash Flow

Cash flow analysis reveals a significant decline in free cash flow growth at -76.23% in the TTM period. The operating cash flow to net income ratio is 0.34, indicating some cash generation capability, but the free cash flow to net income ratio suggests limited free cash flow relative to net losses.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	447.73M	617.57M	716.29M	766.90M	776.26M	644.34M
Gross Profit	280.98M	436.65M	490.35M	569.50M	521.36M	438.92M
EBITDA	15.39M	-607.43M	183.80M	201.59M	86.77M	127.85M
Net Income	-76.74M	-837.07M	18.18M	266.64M	-1.46M	-6.22M
Balance Sheet
Total Assets	378.27M	868.95M	1.73B	2.47B	2.92B	2.25B
Cash, Cash Equivalents and Short-Term Investments	96.39M	315.72M	330.01M	1.06B	1.55B	1.15B
Total Debt	83.04M	504.46M	624.74M	1.21B	1.70B	1.53B
Total Liabilities	232.22M	675.97M	782.62M	1.35B	1.81B	1.64B
Stockholders Equity	146.05M	192.98M	944.62M	1.12B	1.11B	609.63M
Cash Flow
Free Cash Flow	7.68M	50.25M	163.15M	152.64M	179.04M	155.13M
Operating Cash Flow	42.63M	125.20M	246.20M	255.74M	273.22M	236.44M
Investing Cash Flow	364.65M	11.35M	268.67M	104.89M	-365.77M	-732.79M
Financing Cash Flow	-520.43M	-109.14M	-852.77M	-744.80M	466.72M	588.63M

Chegg Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.92
• 50DMA: Negative
• 100DMA: Negative
• 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 0.92 is above the 20-day moving average (MA) of 0.82, above the 50-day MA of 0.88, and below the 200-day MA of 1.15, indicating a bearish trend. The MACD of -0.05 indicates Positive momentum. The RSI at 33.57 is Neutral, neither overbought nor oversold. The STOCH value of 19.98 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
AFYA	79 Outperform	$1.36B	10.56	15.51%	<0.01%	3.48%	12.63%
UDMY	68 Neutral	$696.23M	-179.85	-1.78%	―	2.53%	95.79%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
COUR	61 Neutral	$1.02B	-21.34	-7.43%	―	8.10%	43.35%
LINC	58 Neutral	$840.24M	58.65	7.94%	―	16.90%	41.11%
DAO	55 Neutral	$1.18B	59.89	―	―	-1.51%	155.73%
CHGG	45 Neutral	$78.68M	―	-46.37%	―	-32.37%	90.99%

Chegg Corporate Events

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.